This paper focusses on examining the interplay between transfer pricing adjustments and VAT. Firstly, the differences between TP and VAT as two various systems will be dealt with. On this basis in the second part, this paper will analyse the influence of TP adjustments on VAT settlements. Finally, the example of a case decided upon by the Italian Tax Authority (Agenzia delle Entrate) in November 2018, will shed some light on how European tax authorities tend to approach the discussed problem.
