Free tooling for exclusive parts maker is no paid service

Manufacturing groups that place equipment free of charge with parts suppliers have new guidance to rely on. Skatteverket's guidance on withdrawal of services now reflects General Court judgment T-680/25 Mercedes-BenzSkatteverket, paragraph 33Skatteverket: where a vehicle manufacturer provides equipment free of charge to a parts manufacturer and the parts made with that equipment are used exclusively by the vehicle manufacturer, that is not to be equated with a supply of services for considerationSkatteverket. That holds even if the parts maker sells the parts to the vehicle manufacturer through an intermediarySkatteverket, and the absence of a direct invoicing relationship between the two does not matterSkatteverket.

The holding sits inside the withdrawal-taxation framework the guidance sets out. A taxable person who supplies a service free of charge for purposes other than their own business is treated as withdrawing a service, and a withdrawn service is equated with a supply of services for consideration. The guidance's starting point is that supplying services consumed by someone else normally points to a non-business purpose; only supplies that are strictly business expenditure serving the provider's own needs escape. It is for such chains — where the output flows exclusively back to the provider's own productionSkatteverket — that the judgment gives the answer.

The stated conditions are narrow. The parts made with the equipment must be used exclusively by the vehicle manufacturerSkatteverket; the equipment itself is provided without considerationSkatteverket; the chain may run through an intermediarySkatteverket; and no direct invoicing relationship is requiredSkatteverket. The holding as stated covers only exclusive-use chainsSkatteverket, so arrangements where the supplier's parts also go to other customers sit outside what the guidance now recordsSkatteverket.

Groups with free-placed tooling whose output flows back exclusively to their own production, directly or through intermediaries, should align their withdrawal-taxation position with this holding.Skatteverket Legal basis is T-680/25, Mercedes-Benz, paragraph 33Skatteverket, on the withdrawal rule in article 26.1 of the VAT Directive.