VAT liability regarding Head Office to branch supplies where the branch is a member of a VAT group

The Court of Justice of the European Union (CJEU) recently ruled in Case C-7/13 that supplies of services for consideration from a main establishment in a third country to its branch in a Member State constitute taxable transactions when the branch belongs to a single taxable person, more commonly known as a group, for value added tax purposes. As a consequence of the judgment that single taxable person, as purchaser of those services, becomes liable for the value added tax payable.

Although this case concerned services provided in Sweden, the ruling may have an impact in other Member States. Revenue is currently studying the implications for Irish law. As part of that process, Revenue will consult with the industry, tax advisors and other interested parties.

Until such time as this study of the CJEU judgement, including the consultation process, is completed and new guidance is published, providers of such services may continue to treat these services on the basis of the existing practice.

30 October 2014