🚨 New CJEU Judgment in Case C-726/23 (SC Arcomet Towercranes SRL) – Transfer Pricing Adjustments and VAT

On 4 September 2025, the Court of Justice of the European Union (CJEU) issued an important judgment on intra-group settlements and their VAT implications. In many respects, this ruling could prove to be groundbreaking. More details below.

⚖️ What Did the CJEU Decide?

The Court ruled that transfer pricing adjustments – where they relate to intra-group services – should be treated as remunerated supplies of services within the meaning of the VAT Directive.
This means they are no longer considered purely technical or neutral accounting adjustments for VAT purposes.

👉 The CJEU emphasized that where a transfer pricing adjustment is directly linked to the remuneration for services (for example, to align the profitability level of intra-group services), it should be treated like any other taxable transaction.

💡 What Does This Mean for Polish Taxpayers?

Until now, Polish tax authorities and administrative courts have consistently taken the view that TP adjustments are VAT-neutral – seen as “purely accounting” reconciliations without the nature of payment for a service or supply.
The CJEU’s judgment may fundamentally change this approach.

We may soon see a shift in the practice of the Polish tax authorities, aligning their position with the CJEU’s guidance.
In practice, this could mean that in most cases, transfer pricing adjustments may now require issuing VAT invoices.

📌 Practical Implications – Time to Review Your Arrangements

✅ Taxpayers should thoroughly review intra-group agreements and transfer pricing documentation.
✅ Each TP adjustment should be assessed to determine whether it is purely accounting in nature or actually reflects a supply of services.
✅ Where it does relate to services, VAT invoicing and reporting practices will need to be fully adjusted.

🔎 Was It Really a TP Adjustment?

Although the ruling is significant, it does not settle all questions regarding the intersection of transfer pricing and VAT.
There is still debate as to whether the case C-726/23 truly involved a transfer pricing adjustment, or rather a straightforward remuneration for intra-group services.

In this context, attention is already turning to another potentially landmark case – C-603/24 (Stellantis Portugal) – expected to be decided next year.

We will continue to monitor and report on further key developments in transfer pricing and VAT.

For more information, contact Wojciech Niedźwiedzki and Bartłomiej Senderowski.