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AG opinion on VAT groups with overseas members

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Advocate General Wathelet has delivered his opinion in the Swedish case of Skandia America Corporation USA (C-7/13), about the treatment of transactions involving the Swedish branch of the company, which was included in a Swedish VAT group with other related companies. The Skatteverket (the Swedish tax authority) decided that intra-company charges between the US HQ and its Swedish branch were subject to Swedish VAT, and Skandia’s challenge to that view led to a reference to the CJEU. Unfortunately, the opinion has not been released in English.

However, it appears to suggest that any VAT grouping would be of the company as a whole, and not just the branch. AG Wathelet also confirms that in accordance with longstanding case law, the intra-entity transactions are not supplies subject to VAT. He went on to suggest that the VAT group may be liable for reverse charge VAT on services bought in by Skandia America Corporation USA, to the extent that they are consumed in Sweden by the branch and, through it, the VAT group.