Will the Court this week finally answer what the VAT fixed establishment is?

Berlin Chemie, C-333/20, judgment, 7.04.2022

A German company operates in the pharmaceutical industry. The German company sells its pharmaceutical products (owned by it) in Romania to Romanian customers.

The German company has an agreement to store its goods in a warehouse in Romania (the storage service is provided by a Romanian unrelated company).

The German company also has a subsidiary in Romania. This subsidiary provides marketing and advertising services to the German company. These services consist of advertising the German company’s goods and resolving legal issues related to drug promotion in Romania.

The charge to the German company by the Romanian company is on a cost-plus basis, and the service fees are offset under a group financial system.

The Court will issue a judgment answering the questions:

• Does the German company have a VAT fixed establishment in Romania in this situation?
• Does the human and technical resources in Romania have to participate in decisions concerning the supply of goods in Romania, or is it sufficient that it carries out marketing, advertising, and warehousing activities?
• Can the dependent human and technical resources be considered as a service provider for the VAT FE they create?