Simple VAT registration vs. fixed establishment
![](https://pkf.hu/wp-content/uploads/2023/07/telephely-afa-pkf.jpg)
When is simple VAT registration enough, and when does a foreigner have to have a fixed establishment for his sales activities in another country? This was the subject of C-232/22. Belgian-related Cabot Plastics case.
The European Court of Justice reiterated that the existence of a fixed establishment can only be considered if otherwise head quarter of the company would lead to an irrational result or a conflict between member states. Fixed establishment requires the permanent presence of equipment and personnel and a suitable organization for the use of service.
Tools and people do not necessarily have to be owned by the foreign company, it is enough if the foreign company has them as its own, but it is not possible to double the same resources, that is, to attribute them both to the user and the provider of the service. Thus, the foreigner does not have an establishment in a country where the staff and material conditions are provided by the local subsidiary itself, even if the subsidiary also provides tool manufacturing and other support services for the foreigner’s sales activities.