The Court of Justice of the European Union (CJEU) held that supplies between the non-EU head office and the EU branch should be subject to VAT. The Skandia ruling 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.

In eBrief No. 95/14 Revenue confirms that it is reviewing the implications of the Skandia case and Revenue will consult with the industry, tax advisors and other interested parties, which will include Chartered Accountants Ireland.

Until Revenue has completed its review of the CJEU judgment, including the consultation process, and new guidance is published, existing practice should continue.

The HMRC’s position on the Skandia case is set out in Revenue and Customs Brief 37/14. See our report on here.

A summary of the Skandia case features in the November 2014 issue of tax.point.