This article examines
the complex intersection between Transfer Pricing and Value Added Tax within
the European Union legal framework, focusing on recent rulings by the Court of
Justice of the European Union that increasingly challenge the assumption that
compliance with Transfer Pricing (TP) rules ensures proper VAT treatment of
intra-group services. Through a doctrinal and jurisprudential analysis of the
CJEU’s rulings in Weatherford (C-527/23) and Högkullen (C-808/23), the Opinion
of the Advocate General in Arcomet (C-726/23) and the UK First-tier Tribunal’s
decisions in the Jupiter cases, the paper investigates whether the OECD-aligned
arm’s length principle suffices for VAT purposes, or whether VAT requires an
autonomous and more stringent evaluation under Articles 72, 73, and 80 of the
VAT Directive. The study reveals emerging judicial trends toward a
‘substantialist’ interpretation of VAT law, emphasizing economic reality over
formal compliance, and offers policy recommendations to help multinational
enterprises align their TP and VAT strategies in an increasingly scrutinized
intra-group environment.