Transfer pricing adjustments and VAT in Poland – CJEU judgment

Transfer pricing adjustments and VAT in Poland cannot be assessed 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 itself make the adjustment consideration for a service. Companies must also check whether it changes the price and taxable amount of an earlier supply.

When can a transfer pricing adjustment be subject to VAT?

VAT treatment depends on the economic function of the payment, not on its label, calculation method or documentation. An adjustment may be taxable if it is consideration for an identifiable supply and there is a direct link between the service and payment under a legal relationship involving reciprocal obligations.

Case C-603/24 concerned a Portuguese car distributor using a mechanism designed to achieve a target profitability level. The calculation included warranty repairs and other operating costs. The tax authority treated the portion linked to repairs as payment for a service supplied to the manufacturers.

The CJEU found that repair costs were only one of several calculation elements. The intra-group agreement did not require repair services for a specific payment, so the link between those costs and the adjustment was at most indirect.

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

No. If the adjustment is not consideration for a separate service, it must still be tested as a possible change to the price of an earlier supply. The CJEU highlighted this point in paragraph 47 of the judgment.

The assessment therefore has two steps:

• 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.

Did the CJEU change its approach after Arcomet?

No. In Case C-726/23 Arcomet Towercranes, decided on 4 September 2025, the agreement identified specific intra-group services and used a profitability-based mechanism to calculate remuneration. The CJEU held that such a mechanism could constitute consideration for taxable services.

Both judgments support the same rule: VAT treatment depends on the actual function of the payment and the substance of the legal relationship, not merely on the adjustment formula.

What should businesses in Poland review?

For businesses operating in Poland, transfer pricing and VAT should be analysed together. Companies should compare:

• the intra-group agreement,
• transfer pricing (TP) documentation,
• the adjustment calculation,
• accounting treatment and VAT reporting.

These elements should reflect the same economic model. An accounting note or VAT invoice does not determine the classification; documentation should follow from the tax analysis. Particular attention is required where adjustments include specific cost categories, can be linked to particular supplies, or accompany additional operational obligations.

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