The Author of the Article
To keep in mind
- Managing VAT interactions between a parent company and its international subsidiaries is complex and requires in-depth knowledge of the rules in each country.
- The financial and legal consequences can be significant, including the risk of double taxation and litigation.
- Our international VAT experts offer a personalized, responsive service, helping to identify VAT issues, assess risks and define the best strategy for reducing the tax burden.
A free, no-obligation diagnostic is available to assess the VAT situation and discover the benefits of our services.
The multiple relationships between the parent company and its foreign entities
As head of the tax and accounting department of a company with various international branches of activity and related entities, such as representative offices, branches or subsidiaries, you inevitably manage interactions, and therefore a multitude of VAT issues, between headquarters and these foreign organisations:
- Transfer pricing
- Year-end commercial rebates
- Financial loans
- Re-invoicing of expenses
- Back-office services (accounting, legal services, etc.) on behalf of group entities
- Movement of stocks between several countries
- Sale of shares
- Management fees
- Dividends
- etc.
All these interactions give rise to complicated VAT issues. And they are regularly in the headlines, particularly at the Court of Justice level.
Managing the VAT interactions between a parent company and its international subsidiaries is a complex and delicate subject, requiring in-depth knowledge of the rules applicable in each country, as well as a precise analysis of the transactions carried out within the group. The VAT consequences of these interactions can be far-reaching, both financially and legally, and can lead to the risk of double taxation, penalties, tax audits and even disputes with the competent authorities.
Let's take an example
A company has a factory abroad that manufactures goods exclusively for itself. For years, many tax authorities have been trying to treat the activities of the factory as if it were a permanent establishment of the company, with all the VAT consequences that entails. Read our article on the subject.
The VAT expert's eye
That's why it's essential to call on the services of qualified and experienced VAT experts, who can help you secure your operations, bring your returns into compliance, manage your disputes and implement optimum solutions tailored to your situation.
Our VAT experts have solid expertise in the field of international VAT, and can offer you a personalised, responsive and efficient service. They will help you identify the VAT issues involved in your dealings with your foreign subsidiaries, assess the risks involved, and define the best strategy for securing your operations and reducing your tax burden.
Contact us for a free, no-obligation assessment of your VAT situation, and to find out how we can add value to the management of your international business.