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.”
Notes to editors
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.
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The information contained in this press release is correct at the time of going to press.
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