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European Court of Justice on Skandia America Corp ("SAC") will add substantial costs to financial services businesses

19 September 2014

Gary Campbell, tax partner at Deloitte, said: “The CJEU judgement in Skandia America Corp (“SAC”) is a major decision that impacts a large range of financial services businesses that operate branch structures – including banks and insurers.  As a direct result of this judgment, VAT may need to be charged on supplies and cost allocations between head office and branch entities (where it was not previously).  The value of these supplies and allocations is often substantial and therefore could involve material amounts of VAT.  As many financial services businesses are unable to recover all of the VAT they incur, this will lead to greater amounts of irrecoverable VAT and will represent an additional cost to businesses.”

ENDS

Notes to editors

About Deloitte
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.

Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms.

The information contained in this press release is correct at the time of going to press.

Member of Deloitte Touche Tohmatsu Limited

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