Federico Vincenti and Carola Valente of Valente Associati GEB Partners/Crowe Valente examine an Italian ruling and a CJEU judgment addressing when transfer pricing adjustments fall within VAT scope and the conditions for compliance

The interaction between transfer pricing adjustments and VAT has long been a grey area in both EU and domestic tax law. While transfer pricing is fundamentally a matter of direct taxation, recent developments have made it increasingly clear that certain adjustments can have significant VAT implications – particularly when they are tied to the pricing of specific supplies of goods or services.