Opinion of the Advocate General — ECLI:EU:C:2025:244
Date: 2025-04-03
Language of the case: Romanian
Procedure: Reference for a preliminary ruling
Origin: Romania

Summary C-726/23 – 1 
Case C-726/23 
Summary of the request for a preliminary ruling pursuant to Article 98(1) of 
the Rules of Procedure of the Court of Justice 
Date lodged: 
28 November 2023 
Referring court: 
Curtea de Apel București (Romania) 
Date of the decision to refer: 
16 September 2021 
Applicant and appellant: 
SC Arcomet Towercranes SRL 
Defendants and respondents: 
Direcția Generală Regională a Finanțelor Publice București 
Administrația Fiscală pentru Contribuabili Mijlocii București 
  
Subject matter of the main proceedings 
Appeal against the judgment of the Tribunalul București (Regional Court, 
Bucharest, Romania) dismissing the action brought by SC Arcomet Towercranes 
SRL (‘the appellant’) concerning the partial annulment of the decision to dismiss 
the claim lodged against the tax assessment notice in the amount of 437 705 
Romanian lei (RON) by way of additional value added tax (‘VAT’) owed and the 
amount of RON 222 917 by way of ancillary charges (late payment interest and 
penalties), and for the partial annulment of the tax assessment notice of those tax 
obligations and of the tax inspection report on which the tax assessment notice 
was based. The appellant also seeks exemption from payment of the two amounts 
at issue, recognition of the right to reimbursement of the sum of RON 84 973 and 
actual reimbursement of that amount. 
EN 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-726/23 
 
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Subject matter and legal basis of the request 
Pursuant to Article 267 TFEU, the interpretation is sought of Articles 2(1)(c), 168 
and 178 of Council Directive 2006/112/EC of 28 November 2006 on the common 
system of value added tax. 
Questions referred for a preliminary ruling 
(1) Is Article 2(1)(c) of Council Directive 2006/112/EC on the common system 
of value added tax to be interpreted as meaning that the amount invoiced by a 
company (the principal company) to an associated company (the operating 
company), equal to the amount necessary to align the operating company’s profit 
with the activities carried out and the risks assumed in accordance with the margin 
method of the OECD Transfer Pricing Guidelines, constitutes a payment for a 
service which therefore falls within the scope of VAT? 
(2) If the answer to the first question is in the affirmative, with regard to the 
interpretation of Articles 168 and 178 of Council Directive 2006/112/EC on the 
common system of value added tax, are the tax authorities entitled to require, in 
addition to the invoice, documents (for example, activity reports, [works] progress 
reports, and so forth) justifying the use of the services purchased for the purposes 
of the taxable person’s taxable transactions, or must that analysis of the right to 
deduct VAT be based solely on the direct link between purchase and supply or 
[between purchase and] the taxable person’s economic activity as a whole? 
Provisions of European Union law relied on 
Charter of Fundamental Rights of the European Union (‘the Charter’): 
Article 41(1) and (2)(a) 
Council Directive 2006/112/EC of 28 November 2006 on the common system of 
value added tax (‘the VAT Directive’): Articles 2(1)(c), 168 and 178 
European Union case-law relied on 
Judgment of 14 February 1985, Rompelman v Minister van Financiën, C-268/83, 
ECLI:EU:C:1985:74, paragraph 24; judgment of 29 February 1996, Inzo v 
Belgische Staat, C-110/94, ECLI:EU:C:1996:67, paragraphs 23 and 24; judgment 
of 5 December 1996, Reisdorf v Finanzamt Köln-West, C-85/95, 
ECLI:EU:C:1996:466, paragraphs 19, 26 and 29; judgment of 18 December 1997, 
Garage Molenheide and Others v Belgische Staat, C-286/94, C-340/95, C-401/95 
and C-47/96, ECLI:EU:C:1996:623, paragraph 48; judgment of 8 February 2007, 
Investrand, C-435/05, ECLI:EU:C:2007:87, paragraphs 22 to 24; judgment of 
6 September 2012, Portugal Telecom, C-496/11, ECLI:EU:C:2012:557, 
paragraphs 33, 34, 48 and 49; judgment of 6 December 2012, Bonik, 
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ECLI:EU:C:2012:774, paragraphs 25–27 and 29; judgment of 21 February 2013, 
Becker, C-104/12, ECLI:EU:C:2013:99, paragraph 19; judgment of 3 September 
2014, GMAC UK, C-589/12, ECLI:EU:C:2014:2131, paragraph 29; judgment of 
9 July 2015, Salomie and Oltean, C-183/14, ECLI:EU:C:2015:454, paragraph 59; 
judgment of 22 October 2015, PPUH Stehcemp, C-277/14, ECLI:EU:C:2015:719, 
paragraphs 26–29. 
Provisions of national law relied on 
Legea nr. 571/2003 privind Codul fiscal (Law No 571/2003 establishing the Tax 
Code) (‘the Tax Code’): 
– Article 11 provides that, when establishing the amount of a tax, levy or 
mandatory social security contribution, the tax authorities may disregard a 
transaction that has no economic purpose and alter the fiscal effects of such a 
transaction and may reclassify the form of a transaction or activity so as to 
reflect the economic content of the transaction or activity (principle of 
prevalence of the economic factor over the legal factor); 
– Article 19(5) provides, first, that transactions between related entities are 
carried out according to the arm’s length market price principle and under 
specified or imposed conditions which must not be different from commercial 
or financial relationships established between independent enterprises and, 
second, that transfer pricing principles are taken into account in determining 
the profits of associated entities; 
– Article 126 provides that taxable transactions are those which constitute or are 
treated as a supply of goods or services, which are subject to tax, effected for 
consideration, and sets out the cumulative conditions for a transaction to be 
regarded as taxable; 
– pursuant to Article 129, ‘supply of services’ means any transaction which does 
not constitute a supply of goods; 
– Article 145(2) provides for the right of a taxable person to deduct tax on 
purchases if they are made for the purposes of certain transactions, including, 
under point (a), ‘taxable transactions’; 
– Article 146(1) provides, inter alia, that in order to exercise the right to deduct 
the tax due or paid in respect of goods supplied or to be supplied to it, or in 
respect of services supplied or to be supplied to it, the taxable person must be 
in possession of an invoice issued in accordance with Article 155; 
– Article 150 essentially provides that the person liable to pay the tax is the 
person to whom the services are supplied when they are supplied in Romania, 
including where they are supplied by a taxable person who is not established in 
Romania; 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-726/23 
 
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Normele metodologice de aplicare a Legii nr. 571/2003 privind Codul fiscal, 
aprobate prin Hotărârea nr. 44/2004 a Guvernului (Implementing rules for Law 
No 571/2003 establishing the Tax Code, approved by Government Decision 
No 44/2004) (‘the implementing rules’): 
– point 2, paragraph (2) in conjunction with Article 126 of the Tax Code: 
‘Pursuant to Article 126(1)(a) of the Tax Code, a supply of goods and/or services 
must be made for consideration. The ‘consideration’ condition implies the 
existence of a direct link between the transaction and the consideration obtained. 
A transaction is taxable where it confers a benefit on the customer and the 
consideration obtained is linked to the benefit received, as follows: 
(a) the condition relating to the existence of a benefit for a customer is met 
where the supplier of goods or services undertakes to provide specific goods 
and/or services to the person making the payment or, failing payment, where the 
transaction has been made to enable such an undertaking to be entered into. That 
condition is consistent with services being collective, not admitting of precise 
measurement or being attributable to a legal obligation; 
(b) the condition relating to the existence of a link between the transaction and 
the consideration obtained is met even if the price does not reflect the normal 
value of the transaction, that is, it takes the form of contributions, goods or 
services, or price discounts, or is not paid directly by the recipient but by a third 
party’. 
– Paragraph 41, in conjunction with Article 11 of the Tax Code, specifies that, 
for the purposes of applying transfer pricing rules, the Romanian tax authorities 
must take into account the principles set out in the Transfer Pricing Guidelines 
for Multinational Enterprises and Tax Administrations of the Organisation for 
Economic Co-operation and Development (‘the OECD Guidelines’). 
According to paragraph 4.38 of the OECD Guidelines, ‘compensating 
adjustments’ may be made: this refers to an adjustment in the context in which 
the taxpayer declares for tax purposes a transfer price which, in its view, is in 
line with the arm’s length principle, even if that price is different from the price 
actually paid between associated enterprises. 
Ordonanța Guvernului nr. 92/2003 din 24 decembrie 2003 privind Codul de 
procedură fiscală (Government Order No 92/2003 of 24 December 2003 
establishing the Tax Procedure Code) (‘the Tax Procedure Code’): 
– Article 6 provides that the tax authority is entitled to assess, within the limits of 
its powers and competences, the relevance of facts of a fiscal nature and to 
adopt a solution based on comprehensive findings relating to all the 
illuminating circumstances of the case; 
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– Article 64 provides that the taxpayer’s supporting documents and accounts are 
to constitute proof that the taxable amount has been established; other 
supporting documents, if any, will also be taken into account on that occasion; 
– in accordance with Article 65, it is for the taxpayer to prove the acts and facts 
that were the basis for its returns and any request made to the tax authority 
[paragraph (1)], and it is for the tax authority to give reasons for the tax 
assessment with its own evidence or findings [paragraph (2)]; 
– Article 107 provides for the right of the taxpayer to be informed during the tax 
inspection and for the opportunity to set out its point of view on the tax 
authority’s findings and their tax consequences; 
– Article 109 governs the conditions for drawing up the tax inspection report and 
the effects of it, on the basis of which the tax assessment notice is issued in 
respect of deviations from the tax obligations relating to the periods under 
inspection. 
Succinct presentation of the facts and procedure in the main proceedings 
1 The appellant is part of the Arcomet group, an independent global group in the 
crane rental sector. Within the group, the appellant buys or rents cranes which it 
then sells or rents to customers. The group’s parent company, Arcomet Service 
NV, which is a Belgian company (‘Arcomet Belgium’), seeks suppliers for the 
Romanian company (as well as for the other group companies) and negotiates 
contractual terms with these suppliers. The contractual relationship with suppliers 
and end customers is then entered into by the appellant. 
2 In December 2010, Deloitte Belastingconsulenten (a Belgian company) carried 
out a transfer pricing study for Arcomet Belgium concerning its relationship with 
associated entities, including the appellant. As a result of the comparability 
analysis detailed in the study, it was assessed that the financial result (operating 
profit margin) at market level that the associated entities (including the appellant) 
should record, in accordance with the transfer pricing rules, is between – 0.71% 
and 2.74%. 
3 In Romania, the findings of the study were incorporated into a contract entered 
into on 24 January 2012 between Arcomet Belgium and the appellant, by which 
the parties assumed the responsibilities and risks for selling/purchasing and 
renting cranes. That contract was to apply to commercial relationships entered into 
from 1 January 2011. 
4 Article 3 of the contract at issue establishes the responsibilities of the appellant 
(referred to as the ‘operating company’) in order to determine the local strategy 
for achieving maximum occupancy of the crane fleet and maximising the prices 
offered to customers, which it will transfer to its parent company Arcomet 
Belgium (referred to as the ‘principal’). 
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5 Article 4 of the contract provides for the responsibilities of the principal: 
– the operational fulfilment of the commercial responsibilities, consisting of 
strategy and planning, negotiating (framework) contracts with third-party 
suppliers, negotiating the terms and conditions of financing contracts, 
engineering, finance, [crane] fleet management at central level and quality and 
safety management; 
– the assumption by the latter of the biggest economic risks with regard to the 
activity of the operating company, provided that it complies with the 
instructions, procedures and decisions of the principal in that regard. 
6 The contract provided, in accordance with the findings of the December 2010 
study, that the appellant would be guaranteed an operating profit margin of 
between – 0.71% and 2.74%. To that end, Article 5 of the contract of 24 January 
2012 governed the remuneration of the parties and Annex 3 to the contract laid 
down the following rules: 
– at the end of the year, it would be verified whether the operating company had 
a profit before tax margin (PBTM) of between – 0.71% and + 2.74%; 
– if the operating company’s PBTM was less than – 0.71%, the operating 
company would issue an invoice to the principal for the difference between the 
net profit before tax (NPBT) and a PBTM of – 0.71%; 
– if the operating company’s PBTM was more than or equal to – 0.71% but less 
than + 2.74%, neither party was entitled to remuneration; 
– if the operating company’s PBTM was over + 2.74%, the principal would issue 
an invoice to the operating company for the difference between the NPBT 
obtained and a PBTM of 2.74%. 
– The calculation of the PBTM obtained in accordance with the arm’s length 
principle, of – 0.71% and 2.74% for each financial year, was to be discussed 
and agreed between the parties on the basis of provisional financial statements 
and, where appropriate, subsequently adjusted on the basis of audited and 
approved financial statements. 
7 The contract provided for an equalisation invoice to be issued each year, in order 
to release the parties from their reciprocal obligations, as follows: 
– the appellant in respect of Arcomet Belgium to cover the surplus of losses 
below the margin of – 0.71%, or 
– Arcomet Belgium in respect of the appellant to recover the surplus profit 
obtained above the margin of 2.74%. 
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8 In 2011, 2012 and 2013, the appellant recorded a surplus profit in respect of which 
it received from Arcomet Belgium three equalisation invoices, without VAT, for 
the amounts of EUR 250 937.77 (RON 1 081 868) (‘invoice 1’), EUR 162 076.24 
(RON 741 905) (‘invoice 2’) and EUR 281 769.66 (RON 1 252 128) (‘invoice 3’). 
9 In the return submitted to the Belgian tax authorities, Arcomet Belgium initially 
indicated those three invoices as relating to intra-Community supplies of goods. 
Then, in 2015, Arcomet Belgium corrected the information in the initial return, 
and the Belgian tax authorities considered that the ‘equalisation’ invoices related 
to supplies of services. 
10 In turn, in its own tax return, the appellant indicated invoices 1 and 2 issued in 
2012 as relating to intra-Community purchases of services, in respect of which it 
applied the reverse charge mechanism. The appellant did not mention invoice 3, 
issued in 2013, since it considered that it related to transactions outside the scope 
of VAT. 
11 Between 28 January 2015 and 7 July 2015, the appellant was the subject of a tax 
inspection; the period under consideration ran from 1 January 2011 to 
31 December 2014. The inspection concerned the settlement of the VAT returns 
with negative amounts and the reimbursement option, by which the appellant 
requested a reimbursement of RON 84 973. 
12 The tax inspectors concluded in their report that the abovementioned equalisation 
invoices related to management services acquired by the appellant from Arcomet 
Belgium and requested, in that regard, the production of supporting documents 
attesting that the services had actually been provided and that they were necessary 
for the purposes of the appellant’s taxable transactions. 
13 In addition, the tax inspectors exchanged information with the Belgian tax 
authorities concerning the declaration of the equalisation invoices in the VIES, as 
a result of which the Belgian tax authorities considered that Arcomet Belgium had 
declared the equalisation invoices as being issued for a supply of services. 
14 As regards invoices 1 and 2, for which the reverse charge procedure was applied, 
the tax inspectors denied the right to deduct the VAT relating to those invoices, 
but retained the VAT collected (both [invoices had been] registered under the 
reverse charge mechanism), on the ground that the supply of services and the need 
to carry them out for the purposes of taxable transactions had not been justified. 
15 As regards invoice 3, the tax inspectors took the view that it also related to a 
purchase of intra-Community services from Arcomet Belgium and collected 
additional VAT, without granting the right to deduct the VAT relating to that 
invoice; they relied on the same ground, namely the failure to produce documents 
justifying the supply of the services and the need to carry them out for the 
purposes of taxable transactions. 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-726/23 
 
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16 On the basis of the tax inspection report, the tax assessment notice required the 
appellant to pay a tax debt in respect of additional VAT in the amount of 
RON 738 216, to which ancillary charges (interest and administrative fines) in the 
amount of RON 341 708 were added. The additional difference in VAT retained 
following the tax inspection, amounting to RON 738 216, consists of: 
1. RON 437 705 in respect of non-deductible VAT, consisting of: 
– RON 259 648 in respect of the VAT relating to invoice 1, for which the tax 
inspectors denied the right to deduct VAT; 
– RON 178 057 in respect of VAT relating to invoice 2, for which the tax 
inspectors denied the right to deduct VAT. 
(ii) RON 300 511 in respect of the additional VAT collected following the 
issuance of invoice 3, for which the tax inspectors collected the additional VAT. 
17 The appellant lodged an administrative appeal against the tax inspection report 
and the tax assessment notice. That administrative appeal was dismissed as 
unfounded and unsubstantiated by documents concerning the amount of 
RON 437 705 in respect of VAT and the amount of RON 222 917 (in respect of 
late payment interest and penalties). 
18 The appellant brought a direct action for the annulment of the tax assessment 
notice before the Regional Court, Bucharest, relying on the following grounds: 
– the tax inspection report did not comply with the formal requirements laid 
down by law and the appellant’s rights of defence were infringed; 
– the activities carried out and the risks assumed by Arcomet Belgium in 
connection with the appellant’s activity do not fall within the scope of VAT; 
– assuming the existence of a service falling within the scope of VAT, the right 
to deduct VAT relating to the activities carried out by the appellant was 
unlawfully denied; 
– the tax authorities misinterpreted and misapplied the reverse charge 
mechanism. 
19 As part of its action, the appellant also submitted a request that a preliminary 
ruling be lodged with the Court of Justice regarding the interpretation of 
Articles 2(1)(c), 168 and 178 of the VAT Directive in relation to the factual and 
legal situation of the present proceedings. 
20 The Regional Court, Bucharest dismissed the appellant’s action as unfounded for 
the following reasons. 
21 As regards the ground based on the failure, in the tax inspection report, to comply 
with the formal requirements laid down by law and the infringement of the rights 
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of defence, that court held that the alleged irregularity, consisting of the 
inadequacy of the reasoning of the tax inspection body as regards the appellant’s 
point of view on the findings of the tax inspection, could lead to the annulment of 
the tax assessment notice only if the appellant proved that it had suffered damage 
which could not be remedied in some other way; however, in the present case, the 
appellant has not proven the existence of such damage. 
22 As regards the ground based on the fact that the activities carried out and the risks 
assumed by Arcomet Belgium in connection with the activity in Romania did not 
fall within the scope of VAT, that court referred to the provision in point 2, 
paragraph (2) of the implementing rules and rejected the argument that there was 
no clearly identifiable service provided by Arcomet Belgium, but only 
participation by Arcomet Belgium in all the economic transactions carried out by 
Arcomet in Romania. 
23 As regards the ground based on the right to deduct VAT relating to the activities 
carried out by the appellant, if those activities were to constitute services falling 
within the scope of VAT, that court held, on the basis of the case-law of the Court 
of Justice, that the exercise of the right to deduct VAT is subject to the substantive 
requirement that the goods or services relied on to justify the right at issue must be 
used by the taxable person for the purposes of its taxable output transactions. As 
regards the formal requirements, these also include the requirement that the 
taxable person be in possession of an invoice drawn up in accordance with the 
legal provisions. 
24 Consequently, the taxable person is required not only to be in possession of the 
invoice showing the allegedly deductible VAT, but also to prove that the invoiced 
goods/services were actually supplied and for the purposes of its taxable 
transactions. The use of the expression ‘made for the purposes […]’ in the 
wording of Article 145(2)(a) of the Tax Code means that the goods/services for 
which the tax, in respect of which deduction is sought, was paid must be liable to 
produce an advantage regarding the transactions which are the subject of the 
activity of the taxable person claiming the deduction of VAT. 
25 Lastly, as regards the ground based on the misinterpretation and misapplication of 
the reverse charge mechanism, that court held that the appellant had not been able 
to prove, for the purposes of recognising its right to deduct VAT, the need for the 
purchases for the purposes of its taxable transactions, with the result that the 
reverse charge mechanism was not applicable. 
26 The appellant brought an appeal against the judgment of the Regional Court, 
Bucharest before the referring court, the Curtea de Apel București (Court of 
Appeal, Bucharest). 
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The essential arguments of the parties in the main proceedings 
27 In its appeal, the appellant makes a series of criticisms of the judgment of the 
Regional Court, Bucharest, which concern the following aspects: 
– that court misinterpreted the provisions of Article 126(1) and Article 129(1) of 
the Tax Code because the activities carried out and the risks assumed by 
Arcomet Belgium in connection with the activity in Romania do not fall within 
the scope of VAT; 
– if the services were considered to fall within the scope of VAT, that court 
misinterpreted the provisions of Article 145(2) of the Tax Code with regard to 
the right to deduct VAT in relation to the activities carried out by the appellant; 
– the formal requirement for the deduction of VAT was met because the 
equalisation invoices issued by Arcomet Belgium contain all the elements 
provided for by the Tax Code and were therefore validly issued; 
– the appellant made available to the tax inspectors sufficient supporting 
documents to attest to the assumption of risks and the performance of duties by 
Arcomet Belgium in connection with the activity in Romania, in accordance 
with the provisions of the contract; 
– if it were considered that the [financial] profit and loss adjustments described 
were related to a supply of services, the treatment of the relevant VAT would 
assume that the equalisation invoices of the appellant had been registered as 
relating to intra-Community purchases of services, taxable in Romania, for 
which the reverse charge mechanism should be applied. 
28 In the appeal proceedings, the appellant reiterates its request for a preliminary 
ruling with a series of questions, only two of which have been upheld by the 
referring court, which has reformulated them and referred them to the Court of 
Justice. 
29 The tax authorities, as the defendants at first instance in the main proceedings, 
mainly submit observations on the appellant’s questions. 
30 As regards the first question, they submit that the appellant’s reliance on transfer 
pricing rules cannot be taken into consideration, since the provisions of those rules 
apply only to the correction of revenue or expenditure. Furthermore, the Code of 
Conduct on transfer pricing documentation (OJ 2006 C 176, p. 1) provides that it 
applies only in situations where local law is unclear. However, in Romania, there 
is special legislation regarding the content of transfer pricing documentation. On 
the other hand, the transfer pricing documentation was drawn up for Arcomet 
Belgium, since the Belgian legislation on the basis of which this documentation 
was drawn up cannot be applied to the appellant. 
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31 With regard to the second question referred for a preliminary ruling, the tax 
authorities state, on the basis of the case-law of the Court of Justice (judgment of 
21 March 2000, Gabalfrisa and Others, C-110/98–C-147/98, 
ECLI:EU:C:2000:145, paragraph 46, which refers to paragraphs 23 and 24 of the 
judgment of 29 February 1996, Inzo v Belgische Staat, C-110/94, 
ECLI:EU:C:1996:67 and paragraph 24 of the judgment of 14 February 1985, 
Rompelman v Minister van Financiën, C-268/83, ECLI:EU:C:1985:74), it is for 
the person applying to deduct VAT to prove that the conditions for deduction have 
been met, and the relevant provisions in that regard (Article 4 of the Sixth Council 
Directive 77/388/EEC of 17 May 1977), which have been incorporated into the 
VAT Directive, do not preclude the tax authorities from requiring objective 
evidence in support of the declared intention of the person concerned to 
commence economic activities which will give rise to taxable transactions. 
32 According to the tax authorities, taxable persons are entitled to deduct VAT on 
purchases of goods and services only if two cumulative conditions are met, 
namely that the purchases have been made for the purposes of taxable transactions 
and that they are based on invoices which must contain all the information 
necessary to establish the right to deduct. 
33 The tax authorities assert in that regard that, in order to prove that the services 
purchased were used for the purposes of the taxable transaction, the taxable 
person must not only be in possession of the invoice in which the deductible VAT 
is recorded, but also prove that the services invoiced were actually supplied and 
were for the purposes of its taxable transactions. However, in the present case, 
even though it had the burden of proof, the appellant did not submit any 
supporting documents showing that the services were provided for the purposes of 
its taxable transactions. The documents submitted by the appellant are not activity 
reports showing the nature of the services purchased, the number of hours worked 
per transaction, the human and material resources used or the method of 
calculating the charges set for the services invoiced. 
Succinct presentation of the reasoning in the request for a preliminary ruling 
34 As regards the relevance of the questions referred for a preliminary ruling, the 
referring court considers, first, that they seek the interpretation of provisions of 
EU law [Article 2(1)(c), 168 and 178 of the VAT Directive] and, second, that 
those questions satisfy the premiss laid down in the first paragraph of Article 267 
TFEU, since the answer to those questions is not already apparent from the case-
law of the Court of Justice, either as regards the classification of the transactions 
as taxable transactions or as regards the exercise of the right to deduct VAT. 
35 As regards the need to refer the matter to the Court of Justice, the referring court 
states, first, that the provision of EU law which is the subject of the first question 
referred for a preliminary ruling [namely that Article 2(1)(c) of the VAT 
Directive, which should be interpreted as meaning that the amount invoiced by a 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-726/23 
 
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company (the principal company) to an associated company (the operating 
company), equal to the amount necessary to align the operating company’s profit 
with the activities carried out and the risks assumed in accordance with the margin 
method laid down in the OECD Guidelines, constitutes a payment for a service 
which therefore falls within the scope of VAT] has not yet been interpreted, with 
the result that the referring court is not relieved of the obligation to request a 
preliminary ruling to that effect (judgment of 27 March 1963, Da Costa en 
Schaake NV and Others v Administratie der Belastingen, C-28/62 to C-30/62, 
ECLI:EU:C:1963:6). 
36 Second, the referring court considers that the correct application of EU law, in the 
present case, is not so obvious as to leave no scope for any reasonable doubt and 
for deciding, as a result, to refrain from referring to the Court of Justice a question 
concerning the interpretation of EU law which has been raised before it (judgment 
of 15 September 2005, Intermodal Transports, C-495/03, ECLI:EU:C:2005:552, 
paragraph 37 and the case-law cited) and to decide on its own responsibility 
(judgment of 16 October 1982, CILFIT v Ministero della Sanità, C-283/81, 
EU:C:1982:335, paragraph 16). 
37 Consequently, the specific circumstances of the present case relating to the 
abovementioned administrative practice lead to an uncertain conclusion as to the 
application of the case-law of the Court that has been referred to. Several issues 
arise in the present case, in particular whether the equalisation invoices described 
constitute a formal method of adjusting the operating profit or whether they are 
not linked to any supply of services, but represent a profit adjustment, outside the 
scope of VAT, where there was no clearly identifiable service supplied to the 
appellant by Arcomet Belgium. Furthermore, in the event that there was a service 
supplied to the appellant by Arcomet Belgium and that it fell within the scope of 
VAT, the question arises as to whether the relevant VAT is to be considered 
deductible on the ground that [that service] was for the purposes of the appellant's 
taxable transactions. 
38 Moreover, in the absence of specific national legislation (the provisions of the Tax 
Code only require the existence of an invoice in order to exercise the right to 
deduct VAT), the second question raises the issue of whether the request for 
additional documents other than invoices is consistent with the principle of 
proportionality enshrined in the case-law of the Court of Justice on VAT. It is also 
necessary to determine whether this practice is compatible with the provisions and 
objectives of the VAT Directive and with the principles established by the Court 
of Justice in its case-law regarding the link between service and payment, in order 
to establish the existence of a service within the scope of VAT. 
39 Third, the judgment to be given in the main proceedings is final in accordance 
with the internal appeals system, so that, under the third paragraph of Article 267 
TFEU, the referring court is required to make a reference to the Court of Justice 
for the interpretation of the relevant EU law.