3.8.3 Transactions within the same legal entity

Even though transactions within the same legal entity can be economic activities, they are not subject to VAT, unless the applicable rules explicitly subject these transactions to VAT. An example of services performed within the same legal entity, in this case between a head office and its foreign branch, can be found in CJEU Case law.1 Under the EU VAT Directive, the transfer of business assets from one EU Member State to another EU Member State is deemed to be an (intra-Community) supply followed by an intra-Community acquisition of those same goods.2 The same provisions apply when these goods are transferred from a head office to its foreign branch. The transfer of own goods to a (branch established in a) destination outside the EU is not considered to be a transaction that is subject to VAT, since there is no ‘underlying’ supply of goods (transfer of the right to act as owner) nor a provision that requires this transfer to be treated as a supply for consideration, as is the case with the intra-EU cross-border transfer of own goods.