Affaire CJCE : Une fourniture gratuite d'outillage doit-elle être considérée comme une prestation de services ?

The ECJ Case involving Mercedes Benz (T-680/25) concerns a common VAT issue for businesses involved in manufacturing: whether the free provision of tooling/equipment (used to produce components for the owner of the tool) constitutes a taxable supply of services, and what conditions determine its VAT treatment.

Situation actuelle

In this case, Mercedes-Benz purchased tooling, subject to Romanian VAT to the value of 22.5 million RON, given that the tools remained in Romania. Mercedes-Benz then supplied the tools free of charge (therefore without VAT) to its Romanian sub-suppliers who were producing parts for Mercedes-Benz with the tools.

The Romanian tax authorities denied part of Mercedes-Benz’s input VAT refund claim and assessed additional VAT to the value of 12.17 million RON on the basis that the free provision of tools should be treated as a taxable supply of services by Mercedes-Benz subject to Romanian VAT.

The basis for this assessment was Article 26(1)(b) of the EU VAT Directive, which deems that VAT is due where:

• business assets are used free of charge, and
• that use is treated as a deemed supply of services

In the Romanian tax authorities’ view:

• The moulds are used in Romania
• That use benefits production activity carried out in Romania
• Therefore, the place of taxation follows the place of use, i.e. Romania

Although the tools are owned by Mercedes-Benz and are used exclusively to produce components sold back to it, the Romanian tax authorities argued that the provision of the tools constituted a taxable supply of services, due to the involvement of intermediary suppliers which broke the direct and immediate link between Mercedez-Benz and the manufacturer, which was required in order to supply the moulds free of charge without VAT.

Mercedes‑Benz disagreed, arguing that:

1. The tools were used exclusively for its own business purposes (by manufacturing components that would be sold back to Mercedes).
2. The free provision of tools to suppliers should not be regarded as a VATable supply because ownership remains with Mercedes and the use is ultimately for Mercedes’s own commercial production.
3. A direct invoicing relationship between Mercedes‑Benz and the Romanian sub‑supplier should not be required for this VAT treatment — even if intermediaries are involved.

The European Court of Justice (“ECJ”) has been asked to consider whether the free provision of tools can be treated as a taxable supply of services under Article 26 of the EU VAT Directive, despite the absence of a direct invoicing between the manufacturer of the goods and the owner of the moulds (Mercedes-Benz).

Why is this case relevant

This case is important for businesses operating complex manufacturing and cross-border supply chains within the EU, particularly where companies provide tooling, moulds or equipment to suppliers, sub-suppliers or intermediaries for the purpose of production of parts with those same tools. The outcome could affect whether such arrangements trigger unexpected VAT liabilities, impact input VAT recovery, and shape how tax authorities could assess similar supplier arrangements across the EU going forward.

If the ECJ ultimately decides that the free provision of tools is not a taxable supply, even with intermediaries, then manufacturers can continue to supply tooling to suppliers without creating VAT liabilities simply because intermediaries are involved. Furthermore, input VAT refund claims on such tools would remain valid without local tax authorities re‑characterising the arrangement as a VAT supply.

However, should the ECJ decode that the free provision of the tools is a supply of services whenever intermediaries are involved or a direct invoice is missing then it will mean that companies like Mercedes‑Benz could face significant VAT assessments where they provide tools free of charge.

Multinational supply chains could see increased complexity, with VAT liabilities arising even when no payment is made between related companies. In addition, Member States might interpret similar arrangements as taxable, potentially leading to disputes and reassessments.

In practice, the decision will influence how multinational manufacturers treat the free provision of tooling in VAT compliance, input VAT claims, and cross‑border supply chain structuring across the EU.

There has not yet been an official judgment published by the ECJ on this case.

If you require any support or have any questions on the VAT treatment of the provision of tooling, please feel free to contact us on our website, and our consultants will be happy to help you.