PRAVNI ZAPISI • Year VIII • No. 2 • pp. 249-266
THE VAT TREATMENT OF TRANSACTIONS BETWEEN HEAD OFFICE AND BRANCH
Doc. dr Miloš Milošević
Docent, Pravni fakultet Univerziteta u Beogradu
e-mail: milosevic@ius.bg.ac.rs
Doc. dr Svetislav V. Kostić
Docent, Pravni fakultet Univerziteta u Beogradu
e-mail: skostic@ius.bg.ac.rs
.
Pravni zapisi, No. 2/2017, pp. 249-266
Original Scientific Article
KEY WORDS
VAT, head office, branch, VAT group, FCE Bank, Scandia
ABSTRACT
The VAT treatment of transactions between head office and branch varies depending on the territorial spread of the taxpayer. If the head office and the branch are within the borders of one tax jurisdiction, their transactions are non-taxable since they are conducted within a single tax- payer. The non-taxable treatment of cross-border provision of services be- tween the head office and the branch and vice versa is based on the same argument. However, if one of the entities becomes a member of the local VAT group, the single taxpayer becomes “divided” and the service is subject to taxation. Cross-border supply of goods, on the other hand, is always taxable as required by the destination principle. A detailed analysis of the described tax treatment is the subject of this article.