The Court of Justice of the European Union ruling in the Skandia America Corporation (C-7/13) case held that supplies between the non-EU head office and the EU branch should be subject to VAT.

This judgement is likely to have most impact on the financial services sector and raises the possibility of Irish VAT arising on charges from a foreign head office to its Irish branch. The judgment is also relevant to the UK, and other EU Members States, which have adopted a similar VAT treatment to Ireland.

We will be engaging with Revenue on the implications of the Skandia judgement at the TALC Indirect forum. HMRC have not yet published any commentary on their approach to such cases following the decision. We will report on the Skandia case in next month’s issue of tax.point.