PDV tretman transakcija između centrale i ogranka
The VAT treatment of transactions between head office and branch

Summary/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 nontaxable since they are conducted within a single taxpayer. The nontaxable treatment of cross-border provision of services between 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.

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