Abstract
An OECD working party recently assessed several approaches for dealing with the issue of where to tax B2B services and intangibles acquired by multiple location entities, i.e., taxable persons with a head office and one or more other establishments in different jurisdictions, for consumption tax purposes. Of the two main approaches identified - the direct use method and the recharge method - EU VAT applies the direct use method. In this article, I will discuss both the direct use method applied in EU VAT (section 2) and the recharge method suggested by the OECD (section 3). After comparing these two methods using an example case (section 4), I will further examine the recharge method (section 5) and conclude on what method should be applied in EU VAT (section 6).
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