Portugal vs Stellantis Portugal S.A., May 2026, European Court of Justice, Case No C-603/24
Table of Contents
Case Information
Court: Court of Justice of the European Union (Ninth Chamber)
Case number: C-603/24
Citation: Judgment of 13 May 2026, Stellantis Portugal, S.A. v Autoridade Tributária e Aduaneira, C-603/24
Applicant: Stellantis Portugal, S.A. (as legal successor of Opel Portugal, Lda., formerly General Motors Portugal ('GMP'))
Respondent: Autoridade Tributária e Aduaneira (Tax and Customs Authority, Portugal)
Jurisdiction: European Union / Portugal
Judgment date: 13 May 2026
Judgment Summary
This preliminary ruling concerned the interpretation of point 1 of Article 2 of Sixth Council Directive 77/388/EEC of 17 May 1977 ('the Sixth VAT Directive') [1].
The Supremo Tribunal Administrativo (Supreme Administrative Court, Portugal) referred a question asking whether an adjustment of a transfer price of motor vehicles, set out in an intra-group agreement, evidenced by credit or debit notes, and calculated partly on the basis of after-sales repair costs borne by the acquiring company, constitutes consideration for a 'supply of services effected for consideration' within the meaning of that provision [20, 27].
The Court held that such an adjustment does not constitute consideration for a supply of services for VAT purposes, unless there exists between the companies concerned a legal relationship characterised by reciprocal commitments relating to the supply of services by the acquiring company to the selling company and the payment of remuneration for those services in the form of such an adjustment, establishing a direct link between the supply of those services and that adjustment [48].
Background
GMP formed part of the General Motors group [9]. The group included original equipment manufacturers ('OEMs') that manufactured motor vehicles and parts, and national sales companies/national sales organisations ('NSCs/NSOs') that distributed those products in defined geographical markets [10].
GMP operated as an NSC/NSO in Portugal. It purchased motor vehicles from OEMs established in the European Union ('the OEMs concerned') and sold those vehicles to independent dealers in Portugal, who in turn resold them to final customers [11].
Where vehicles were affected by defects from the production process (Recall Campaigns), anomalies covered by manufacturer warranties (Policy and Warranty), or were subject to roadside assistance procedures (Road Side Assistance), customers presented those vehicles to the dealers for repair. Those dealers then invoiced GMP for the cost of those repairs, applying VAT [12].
GMP informed the OEMs concerned of the costs it had borne for distributing those vehicles, including repair costs and its own operating costs such as staff, electricity and marketing [13].
Under an agreement concluded in 2004 between companies of the General Motors group concerning the fixing of transfer prices ('the 2004 agreement'), the prices of vehicles, parts and accessories sold by the OEMs to the NSCs/NSOs could be adjusted to guarantee the NSCs/NSOs a previously determined profit margin [14]. Transfer prices were determined by deducting from external sale prices the amount corresponding to distribution costs and the previously determined profit margin. At the end of each reference period a transfer pricing adjustment was made to bring the actual profit margin into line with the previously determined margin, evidenced by a credit or debit note sent by the OEMs to GMP [14].
Following an inspection of GMP's 2006 financial year, the tax and customs authority issued a report on 10 December 2009 concluding that GMP had provided repair services for motor vehicles to the OEMs concerned in the national territory and that those services were subject to VAT. The authority required payment of EUR 1 504 215.49, corresponding to VAT due on those services and compensatory interest [15].
GMP challenged that decision before the Tribunal Administrativo e Fiscal de Sintra, which upheld GMP's action [16]. The Tax and Customs Authority appealed to the Tribunal Central Administrativo Sul, which upheld the appeal [17]. GMP then brought an exceptional appeal on a point of law before the Supremo Tribunal Administrativo, which referred the question to the Court of Justice [18].
In the meantime, GMP became Opel Portugal, which was subsequently absorbed by Stellantis Portugal [19].
Core Dispute
The central question was whether point 1 of Article 2 of the Sixth VAT Directive must be interpreted as meaning that an adjustment of a transfer price of motor vehicles, which is duly set out in an agreement between companies belonging to the same group intended to guarantee a previously determined profit margin, evidenced by a credit or debit note, and calculated on the basis of costs including third-party repair costs incurred by the acquiring company, constitutes consideration in respect of a 'supply of services effected for consideration' [20, 27].
The Portuguese Tax and Customs Authority took the position that GMP had provided repair services to the OEMs concerned and that the transfer price adjustments constituted the remuneration for those services, making them subject to VAT [15]. GMP contended that the adjustments did not constitute remuneration in respect of repair services [16].
Court Findings
The Court recalled that, under settled case-law, a supply of services is carried out 'for consideration' within the meaning of point 1 of Article 2 of the Sixth VAT Directive only if there is a direct link between that supply and the consideration actually received. Such a direct link is established where there is a legal relationship between the provider and the recipient pursuant to which there is reciprocal performance, the remuneration received constituting actual consideration for an identifiable service [30].
The Court noted that the sole legal relationship between GMP and the OEMs concerned mentioned by the referring court was that arising from the 2004 agreement [36]. The object of that agreement was to fix the transfer prices of vehicles sold by the OEMs to GMP, and the adjustments provided for were intended to guarantee GMP a previously determined profit margin [37].
None of the clauses of the 2004 agreement referred to in the order for reference stated that there was a legal relationship under which GMP was obliged to repair, in return for remuneration, vehicles purchased from the OEMs concerned [38]. The order for reference also provided no other evidence, including unwritten factual material, that could reveal the existence of such a legal relationship [39].
Accordingly, the information before the Court did not support the conclusion that there was, between GMP and the OEMs, a legal relationship pursuant to which there was reciprocal performance consisting of the provision of repair services by GMP to those OEMs and remuneration for those services [40].
The Court further found that the adjustments were calculated taking into account not only repair costs invoiced by independent dealers to GMP but also GMP's operating costs. The costs relating to repairs therefore appeared to be only one of the parameters taken into account for the calculation of those adjustments [43]. Once the previously determined profit margin was obtained, it did not appear that GMP was guaranteed reimbursement of all its costs, including repair costs [44].
In the light of the foregoing, the link that may exist between any repair services provided by GMP and the transfer price adjustments appeared, at most, only indirect, subject to verifications by the referring court [45].
As to the Portuguese Government's argument that GMP acted on behalf of the OEMs in bearing repair costs, thereby taking part in a supply of services by dealers to those OEMs under Article 6(4) of the Sixth VAT Directive, the Court found that the documents before it contained nothing from which it could be inferred that GMP took part in such a supply of services acting on behalf of another [46].
The Court also noted that should the referring court find that the adjustments constituted an amendment of the purchase price paid by GMP rather than remuneration for repair services, it would be for the competent national authorities to assess the effect of such an amendment on the determination of the taxable amount of the supply of vehicles by the OEMs to GMP, in the light of Article 11 of the Sixth VAT Directive [47].
Outcome
The Court ruled that point 1 of Article 2 of Sixth Council Directive 77/388/EEC of 17 May 1977 must be interpreted as meaning that an adjustment of a transfer price of motor vehicles which is duly set out in an agreement concluded between companies belonging to the same group intended to guarantee that the company acquiring such vehicles obtains a previously determined profit margin on the resale of those vehicles, evidenced by a credit or debit note sent by the selling company to the acquiring company, and calculated on the basis, inter alia, of the costs incurred by the acquiring company in connection with the repair by third parties of those vehicles, does not constitute consideration for a 'supply of services effected for consideration' within the meaning of that provision, unless there is, between those companies, a legal relationship characterised by reciprocal commitments relating to the supply by the acquiring company of services to the selling company and the payment by the selling company of remuneration in respect of those services in the form of such an adjustment, establishing a direct link between the supply of those services and that adjustment [48].
Costs were reserved for the referring court as a matter for that court to decide, since the preliminary ruling proceedings constituted a step in the action pending before it. Costs incurred in submitting observations to the Court, other than those of the parties, were not recoverable [49].
TP Method Highlighted
The 2004 agreement used a resale-price-minus approach. Initial transfer prices for vehicles sold by OEMs to GMP were determined by deducting from external sale prices (the prices for sale of vehicles to third-party dealers) the amount corresponding to related distribution costs and a previously determined profit margin for the NSC/NSO concerned [14].
At the end of each reference period, a transfer pricing adjustment was made to increase or reduce the actual profit margin of GMP in order to make it equal to the previously determined profit margin. That adjustment was evidenced by a credit or debit note sent by the OEMs to GMP and was required to be shown in the accounting records of the OEMs [14].
The adjustments were calculated on the basis of all distribution costs incurred by GMP, including repair costs invoiced by independent dealers to GMP and GMP's operating costs such as staff, electricity and marketing [13, 33, 43].
Major Issues / Areas of Contention
- Whether an intra-group transfer price adjustment constitutes consideration for a 'supply of services effected for consideration' within the meaning of point 1 of Article 2 of the Sixth VAT Directive.
- Whether a direct link exists between repair services allegedly provided by GMP to the OEMs and the transfer price adjustments made under the 2004 agreement.
- Whether the 2004 agreement gave rise to a legal relationship between GMP and the OEMs under which GMP was obliged to provide repair services in return for remuneration.
- Whether GMP acted on behalf of the OEMs, within the meaning of Article 6(4) of the Sixth VAT Directive, by bearing the repair costs invoiced by the independent dealers.
- Admissibility of the reference, given the European Commission's doubts as to whether the order for reference provided sufficient factual information to establish what the transfer price adjustments corresponded to [21].
- Whether, if the adjustments do not constitute remuneration for repair services, they should instead be treated as a subsequent amendment to the purchase price of the vehicles, with potential consequences for the taxable amount under Article 11 of the Sixth VAT Directive.