VAT focus: The CJEU decision in Skandia

Nick Skerrett

Gary Barnett

The CJEU has held that reverse charge VAT is due where an overseas entity recharges costs to a branch registered within a VAT group, in a decision that sits uncomfortably with the principle in FCE Bank. Nick Skerrett and Gary Barnett (Simmons & Simmons) consider the implications.

Sometimes the solution to a problem can cause more problems than it solves. UK taxpayers would be forgiven for thinking the CJEU judgment in Skandia America Corporation USA v Skatteverket (C-7/13) to be one such problematic solution where the resolution of a Swedish VAT group issue has the potential to cause widespread disruption to global procurement and service company structures across the financial services sector. To make matters worse the CJEU was solving a problem the UK simply didn’t have.

Despite being decried as a fiscal theme park of inverted realities VAT can produce strikingly sensible judgments. The 2006 decision of...

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Despite being decried as a fiscal theme park of inverted realities VAT can produce strikingly sensible judgments. The 2006 decision of...

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