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Global Tax 50 2014: Skandia

16 December 2014

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ECJ judgement

 Skandia
Skandia is a new entry this year
The ECJ case hinged on the supply by Skandia America Corporation (SAC), a US company without an establishment in the EU, of IT services purchased by SAC from a third party to the company's Swedish branch, Skandia Sverige (SKS), which had joined a Swedish VAT group. VAT was not applied to the costs charged by SAC to SKS, a position disputed by the Swedish tax authorities, and the question was referred to the ECJ.

Following the principles of FCE Bank (2006), the taxpayer argued that the supplies from SAC to SKS should be disregarded for VAT purposes as cross-border supplies of services from a company to its EU branch. The ECJ, however, said the services were not a supply from SAC to its branch (SKS), but rather, for VAT purposes, were a supply from SAC to the VAT group to which the branch (SKS) belonged. Therefore the supplies were taxable and the Swedish VAT group of which SKS was a member must account for the VAT due.

The judgement caused huge concern among financial services taxpayers, which benefit from certain VAT exemptions, because of their frequent use of branches to conduct overseas business and of VAT groups to minimise VAT leakage.

There is still a lack of clarity on how member states will apply the ECJ's decision. Some national authorities have issued brief statements pointing out that their VAT grouping rules differ from Swedish VAT grouping rules (as the UK authority did in October) but taxpayers remain in wait-and-see mode. Financial services taxpayers, in particular, will not have welcomed the uncertainty-inducing influence the Skandia case has had during 2014.

The Global Tax 50 2014
View the full list and introduction
Gold tier (ranked in order of influence)
1.  Jean-Claude Juncker  2.  Pascal Saint-Amans  3.  Donato Raponi  4.  ICIJ  5.  Jacob Lew  6.  George Osborne  7.  Jun Wang  8.  Inverting pharmaceuticals  9.  Rished Bade  10.  Will Morris

Silver tier (in alphabetic order)
Joaquín Almunia Apple Justice Patrick Boyle CTPA Joe Hockey IMF Arun Jaitley Marius Kohl Tizhong Liao Kosie Louw Pierre Moscovici Michael Noonan Wolfgang Schäuble Algirdas Šemeta Robert Stack

Bronze tier (in alphabetic order)
Shinzo Abe Alberto Arenas Piet Battiau Monica Bhatia Bitcoin Bono Warren Buffett ECJ Translators Eurodad Hungarian protestors Indian Special Investigation Team (SIT) Chris Jordan Armando Lara Yaffar McKesson Patrick Odier OECD printing facilities Pier Carlo Padoan Mariano Rajoy Najib Razak Alex SalmondSkandia Tax Justice Network Edward Troup Margrethe Vestager Heinz Zourek






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