Subsidiary as a Fixed Establishment

Lipniewicz, Rafał

Abstract

Fixed establishment (FE) is one of the institutions of the EU value added tax system; its structure is essential to correctly determine the right tax jurisdiction of an EU Member State for the purpose of VAT settlement in situations of cross-border provision of services. However, the legal structure of a FE adopted by the EU legislator (and, consequently, adapted to national legislation of the Member States) causes uncertainty when it comes to its interpretation. In the absence of unambiguously defined conditions in EU law to consider a specific presence and activity of an enterprise to be a FE, interpretation rules contained in judicial decisions
issued by the Court of Justice of the EU play an important role. Among attempts
made by the CJEU to clarify the ‘blur areas’ resulting from the dynamics of modern
business processes, one of the most interesting ones is the possibility of considering
a subsidiary to be a fixed establishment for a parent company. The purpose of this
paper is to analyse legal and economic factors, the fulfilment of which may constitute a condition for considering a subsidiary to be a fixed establishment for
a parent company, with particular emphasis on the ruling of the Court of Justice
of 7 May 2020 in the Dong Yang case (C-547/18).

Keywords

vat (8)fixed establishment (1)place of supply of services (1)subsidiary (1)economic reality (1)

References

Beretta G., Dong Yang Electronics (Case C-547/18): Oh Yes, a Subsidiary Can (also) Be a Fixed Establishment under EU VAT, but Information Asymmetries May Save You!, “Kluwer International Tax Blog” 15.06.2020, http://kluwertaxblog.com/2020/06/15/dongyang-electronics-case-c-547-18-oh-yes-a-subsidiary-can-also-be-a-fixed-establishment-under-eu-vat-but-information-asymmetries-may-save-you/ (access: 5.11.2020). [Google Scholar]
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Heydari S., When One Becomes Two: The Forlorn Future of the Fixed Establishment, “Derivatives & Financial Instruments” 2014, 3 [Google Scholar]
Rutkowska-Brdulak A., Stałe miejsce prowadzenia działalności w VAT a podmiotowość prawnopodatkowa. Dylematy, konsekwencje, ryzyka, LEX 2018. [Google Scholar]
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Schippers M.L., Boender J.M.B., VAT and Fixed Establishments: Mysteries Solved?, “Intertax” 2015, 11. [Google Scholar]

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Cite this record

APA style

Lipniewicz, Rafał (2021). Subsidiary as a Fixed Establishment. (2021). Subsidiary as a Fixed Establishment. Krytyka Prawa. Niezależne Studia Nad Prawem, 13(2), 78-94. https://doi.org/10.7206/kp.2080-1084.450 (Original work published 6/2021AD)

MLA style

Lipniewicz, Rafał. “Subsidiary As A Fixed Establishment”. 6/2021AD. Krytyka Prawa. Niezależne Studia Nad Prawem, vol. 13, no. 2, 2021, pp. 78-94.

Chicago style

Lipniewicz, Rafał. “Subsidiary As A Fixed Establishment”. Krytyka Prawa. Niezależne Studia Nad Prawem, Krytyka Prawa. Niezależne Studia nad Prawem, 13, no. 2 (2021): 78-94. doi:10.7206/kp.2080-1084.450.

Copyright info

CC-BY

[1] Beretta G., Dong Yang Electronics (Case C-547/18): Oh Yes, a Subsidiary Can (also) Be a Fixed Establishment under EU VAT, but Information Asymmetries May Save You!, “Kluwer International Tax Blog” 15.06.2020, http://kluwertaxblog.com/2020/06/15/dongyang-electronics-case-c-547-18-oh-yes-a-subsidiary-can-also-be-a-fixed-establishment-under-eu-vat-but-information-asymmetries-may-save-you/ (access: 5.11.2020). [Google Scholar]

[2] Beretta G., Dong Yang Electronics (Case C-547/18): Can a Subsidiary Be (also) a Fixed Establishment under EU VAT?, “Kluwer International Tax Blog” 22.11.2019, http://kluwertaxblog.com/2019/11/22/dong-yang-electronics-case-c-547-18-can-a-subsidiarybe-also-a-fixedestablishment- under-eu-vat/ (access: 5.11.2020). [Google Scholar]

[3] Bijl J., The EU VAT Treatment of Vouchers in the Context of Promotional Activities, Tilburg 2019. [Google Scholar]

[4] Doesum, van, A., Nellen F., Economic Reality in EU VAT, “EC Tax Review” 2020, 5. [Google Scholar]

[5] Heydari S., When One Becomes Two: The Forlorn Future of the Fixed Establishment, “Derivatives & Financial Instruments” 2014, 3 [Google Scholar]

[6] Rutkowska-Brdulak A., Stałe miejsce prowadzenia działalności w VAT a podmiotowość prawnopodatkowa. Dylematy, konsekwencje, ryzyka, LEX 2018. [Google Scholar]

[7] Terra B., Kajus J., Introduction to European VAT, “IBFD” 2019. [Google Scholar]

[8] Sarnowski J., Selera P., Bartosiak A., Stałe miejsce prowadzenia działalności gospodarczej na gruncie niemieckiego podatku VAT i niemieckiej praktyki podatkowej, “Kwartalnik Prawa Podatkowego” 2018, 3 [Google Scholar]

[9] Schippers M.L., Boender J.M.B., VAT and Fixed Establishments: Mysteries Solved?, “Intertax” 2015, 11. [Google Scholar]

Krytyka Prawa. Niezależne Studia nad Prawem