On 13 May 2026, the Court of Justice of the European Union (CJEU) delivered its judgment in Case C-603/24, addressing a request for a preliminary ruling concerning the interpretation of Article 2(1) of the Sixth VAT Directive in relation to supplies of services for consideration.
The CJEU examined whether certain transfer pricing adjustments made between companies within the General Motors group, intended to ensure predetermined profit margins, could be regarded as consideration for vehicle repair services subject to VAT.
The dispute arose between Stellantis Portugal, S.A., the successor company to Opel Portugal (formerly General Motors Portugal – “GMP”), and the Portuguese Tax Authorities. GMP operated in Portugal as part of the General Motors group, which included, among others, companies engaged in the manufacture and supply of motor vehicles, parts and accessories to other group entities.
When vehicles presented manufacturing defects, issues covered by the manufacturer’s warranty, or roadside assistance-related problems, customers brought them to dealerships. The dealerships carried out the repairs and invoiced GMP for the related costs, charging the applicable VAT.
The dispute originated from a tax audit relating to the 2006 financial year, during which the Portuguese Tax Authorities took the view that certain transfer pricing adjustments made between GMP and the group’s manufacturing entities actually constituted remuneration for VATable vehicle repair services. This conclusion was reached even though the adjustments took into account not only repair costs but also other costs incurred by GMP in the course of its distribution activities, such as personnel, electricity and marketing expenses.
Under an intragroup agreement entered into in 2004, the transfer prices of vehicles, parts and accessories could be adjusted at the end of each period to ensure that the distribution entities achieved a predetermined profit margin. These adjustments were implemented through credit notes where GMP’s profit fell below the agreed margin and through debit notes where its profit exceeded the target margin.
The key issue was whether the inclusion of repair costs in the calculation of the transfer pricing adjustments was sufficient to conclude that GMP had supplied repair services to the group’s manufacturing entities and that such adjustments constituted consideration for those services.
Resolving this issue was crucial because the Portuguese Tax Authorities considered that repair costs arising from manufacturing defects, manufacturer warranties or roadside assistance obligations should ultimately be borne by the manufacturers. According to their interpretation, GMP initially incurred those costs and subsequently recharged them to the manufacturers through the transfer pricing adjustments. On that basis, the authorities concluded that GMP had supplied repair services subject to VAT and assessed additional VAT and compensatory interest amounting to EUR 1,504,215.49.
The CJEU recalled that, for a supply of services to be subject to VAT, there must be a legal relationship between the parties involving reciprocal performance, such that the remuneration received constitutes the actual consideration for a specific service supplied to the recipient.
In the case at hand, the intragroup agreement was intended to ensure that GMP achieved a predetermined profit margin through transfer pricing adjustments, but it did not establish any specific obligation on GMP to provide repair services to the manufacturers in exchange for remuneration. Furthermore, repair costs were only one of the elements taken into account in calculating the adjustment, alongside other general operating expenses. Accordingly, the CJEU held that the connection between the repairs and the transfer pricing adjustments was merely indirect and that those adjustments could not automatically be regarded as consideration for VATable repair services.
Nevertheless, the CJEU left the final assessment of the facts to the national court. It will be for the Portuguese court to determine whether, independently of the transfer pricing agreement, there existed a legal relationship allowing the identification of a specific supply of services directly linked to a corresponding remuneration, in which case the adjustment could be subject to VAT.
The judgment also leaves open an important practical issue. Where a transfer pricing adjustment does not constitute remuneration for an independent supply of services, it may be necessary to assess whether it should instead be treated as a subsequent adjustment to the purchase price of the vehicles, potentially affecting the taxable amount of the original supplies.
How can we assist you?
With more than 30 years of experience in indirect taxation, customs and international trade, Salinas & Partners is available to assist you in assessing the VAT and customs implications of transfer pricing adjustments, as well as in defending tax assessments arising from the characterization of such adjustments as VATable supplies of services.
On 3 June 2026, the General Court of the European Union delivered its judgment in Case T-198/25, G Kft., addressing a request for a preliminary ruling concerning the interpretation of Articles 167, 168, 179, 180, 183, 250 and 252 of the VAT Directive, as well as the principles of effectiveness, fiscal neutrality and proportionality, in the context of the regularisation of VAT incorrectly invoiced in respect of a period already closed by a tax audit.
The General Court examined whether EU law precludes national legislation that limits the possibility of regularising VAT incorrectly invoiced where the period concerned has already been subject to a tax audit, unless the taxable person provides a new element capable of altering the conclusions reached in that audit.
The dispute arose between G Kft., a Hungarian company engaged in the rental of reusable crates and pallets to fruit producers, retailers, wholesalers and food processing companies, and the Appeals Directorate of the Hungarian National Tax and Customs Administration.
The controversy arose because the company had invoiced VAT on certain deposits linked to the delivery of those goods, even though it was subsequently considered that those transactions did not fall within the scope of VAT. Specifically, G Kft. applied a deposit system under which, when delivering the crates and pallets to its customers, it invoiced certain amounts intended to encourage the return of the goods within the prescribed period. If the customer returned only part of the goods, the relevant invoices were adjusted; if all the goods were returned, the invoices were cancelled. However, those invoices included VAT, although the Hungarian authorities subsequently considered that those deposit transactions should not have been subject to that tax.
Following the opening and completion of a tax audit relating to the period from January 2015 to July 2017, the company requested, in November 2020, the opening of a new audit in order to regularise the VAT incorrectly invoiced. The Hungarian tax authority refused that request on two occasions, taking the view that there was no new fact or circumstance, as required under national law in order to reopen a period already closed by a tax audit.
A Hungarian court referred a question to the General Court for a preliminary ruling in order to determine whether the VAT Directive and the principles of effectiveness, fiscal neutrality and proportionality preclude national legislation that makes the regularisation of VAT incorrectly invoiced in respect of a period already audited conditional upon the existence of a new element capable of altering the conclusions of the previous audit.
For its part, G Kft. argued that the VAT had been incorrectly invoiced and paid, and that there was therefore no loss to the tax authority. However, the Hungarian authorities considered that the company had had the opportunity to correct its position earlier, whether before the tax audit began, during the audit procedure itself, or by challenging the decision that brought that procedure to an end in August 2018.
The Court concluded that the VAT Directive and the principles of effectiveness, fiscal neutrality and proportionality do not preclude national legislation of this kind, provided that the taxable person has been able effectively to exercise its right to regularisation within a reasonable period. In this regard, the Court considered it relevant that G Kft. had had more than three years in which to request the regularisation of the VAT: before the opening of the tax audit, during the audit procedure itself and, subsequently, through a possible appeal against the decision that brought that audit to an end. Accordingly, the Court held that the refusal to open a new tax audit did not amount to an absolute and disproportionate denial of the right to regularise the VAT, but rather to the application of a procedural rule that is permissible from the perspective of EU law.
Consequently, the General Court confirmed that a taxable person who has incorrectly invoiced VAT may request its regularisation, but that such right must be exercised in accordance with the procedural rules and time limits laid down by national law. Where the period has already been closed by a tax audit, the Member State may require the existence of a new element in order to reopen it, provided that the taxable person had previously had a genuine and reasonable opportunity to correct its position.
How can we assist you?
With more than 30 years of experience in tax advisory services, Salinas & Partners is available to assist you with the review of transactions subject to VAT, the regularisation of amounts incorrectly invoiced, the preparation of corrective invoices and the assessment of risks arising from tax audits that have already been closed.
On 30 May 2026, Order ECM/536/2026 of 29 May was published in the Spanish Official State Gazette (BOE), updating ten annexes to the Regulation on the control of foreign trade in defence equipment, other equipment and dual-use products and technologies, approved by Royal Decree 679/2014 of 1 August, which came into force on 5 June 2026.
The main purpose of this Ministerial Order is to bring the Spanish export control regime into line with the latest amendments to European Union legislation, international export control and non-proliferation regimes, and international bodies and treaties. In particular, it transposes Delegated Directive (EU) 2026/325, which updates the list of defence-related products in line with the European Union Common Military List.
The Order amends Annexes I.1, I.2, II.1, II.2, III.1, III.2, III.5, IV, V.1 and, furthermore, the appendix of definitions in the Regulation. In particular, the lists relating to defence equipment, dual-use items and technologies, weapons of war, other controlled materials, as well as the technical definitions necessary for their correct interpretation, are updated.
Through this Ministerial Order, Spanish legislation is brought into line with Regulation (EU) 2021/821, which constitutes the European reference framework for the control of exports, brokering, technical assistance, transit and transfer of dual-use items.
The Order maintains certain national controls in those areas not yet fully covered by European legislation. This provision is particularly relevant with regard to sensitive technologies, software and technical knowledge that may have both civilian and military applications, and is intended to strengthen the capacity to respond to risks arising from the current international security context.
Furthermore, the Order introduces improvements in clarity and legal certainty through the standardisation of terminology, the clarification of classification criteria, a better presentation of the annexes and the updating of certain definitions. These improvements aim to reduce potential misinterpretations by the operators concerned and the competent public authorities.
From a practical point of view, the Order mainly affects:
- Companies exporting defence equipment.
- Manufacturers and distributors of dual-use products.
- Foreign trade operators.
- Public authorities responsible for export controls.
These operators will need to review the classification of their products, technologies, software and technical documentation. They will also need to check whether they are included in the new control lists and, where necessary, adapt their internal export control procedures. Furthermore, the relevant public authorities will have to apply the new technical criteria when processing, reviewing and assessing applications for authorisation.
How can we assist you?
At Salinas & Partners, we recommend that all operators who manufacture, trade, import and/or export defence equipment and dual-use technologies (civil and military) carry out a review of their products and technical and control documentation to ensure full compliance with the obligations arising from the relevant regulations in general and this Ministerial Order in particular.
With over 30 years’ experience in legal consultancy, we at Salinas & Partners are at your disposal for any queries or comments you may have.