A European Court of Justice ruling in favor of automaker Stellantis will push companies to draft their intercompany transaction contracts more deliberately.
The court ruled Wednesday that price adjustments involving Stellantis’ Portuguese subsidiary and local dealerships weren’t subject to value-added tax, but it left the door open to such adjustments being taxable if there is a legal relationship that can be characterized as a supply of services.
Such intricacies need greater scrutiny when drafting intercompany contracts to ensure they are properly taxed, tax professionals said.
“The wording of the contract is crucial,” said Isabel Verlinden, partner for transfer pricing & …