Transfer pricing adjustments and VAT in Poland – CJEU judgment

Transfer pricing adjustments and VAT cannot be classified under one automatic rule. In its judgment of 13 May 2026 in Case C-603/24, the Court of Justice of the European Union (CJEU) confirmed that including specific costs in a profitability adjustment does not by itself make the adjustment consideration for a service. Businesses must also determine whether it changes the price and taxable amount of an earlier supply.

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When can a transfer pricing adjustment be subject to VAT?

VAT treatment depends on the economic substance of the payment, rather than its label, calculation method or documentation.

An adjustment may be taxable where it constitutes consideration for an identifiable supply. This requires a direct link between the service and the payment and a legal relationship involving reciprocal obligations.

Case C-603/24 concerned a Portuguese car distributor whose profitability was adjusted to a target level. The calculation included warranty repair costs as well as personnel, marketing, energy and other operating costs.

The Portuguese tax authority treated the part linked to repairs as consideration for a service. The CJEU found, however, that repair costs were only one of several elements affecting the adjustment and that the intra-group agreement did not require the distributor to provide repair services to manufacturers for a specific payment.

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Does the absence of a service mean the adjustment is outside VAT?

No. Even where an adjustment is not consideration for a separate service, businesses must determine whether it changes the price of an earlier supply.

In paragraph 47, the CJEU indicated that a subsequent change to the price of previously supplied vehicles could affect the taxable amount.

The analysis should therefore follow two stages:

• determine whether the payment is consideration for a separate service,
• if not, determine whether it changes the consideration for an earlier supply of goods or services.

Only where neither applies can the adjustment be assessed as falling outside the scope of VAT.

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How does the judgment compare with Arcomet?

The ruling does not contradict Case C-726/23 Arcomet Towercranes of 4 September 2025.

In Arcomet, the agreement identified specific intra-group services, while remuneration was calculated using a profitability-based mechanism. The CJEU held that such a settlement could constitute consideration for taxable services.

Both judgments therefore confirm that VAT treatment depends on the actual function of the payment and the substance of the legal relationship, not merely on the transfer pricing calculation method.

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What should businesses in Poland review?

Because VAT is harmonised across the European Union, the judgment is also relevant to businesses operating in Poland.

Companies should review together:

• intra-group agreements,
• transfer pricing (TP) documentation,
• the adjustment calculation,
• the actual course of transactions,
• accounting treatment and VAT reporting.

These elements should reflect the same economic model. An accounting note or VAT invoice does not determine the VAT classification; documentation should follow from the underlying tax analysis.

This makes parallel transfer pricing and VAT analysis particularly important for adjustments involving specific cost categories, identifiable supplies or additional operational obligations.

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If you have any further questions or require additional information, please contact your business relationship person or use the enquiry form on the HLB Poland website.

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