In its eagerly awaited judgment in the Arcomet Towercranes case, the ECJ clarifies when compensation payments, aimed at adjusting profit margins to the arm’s length principle, may constitute remuneration for a taxable supply. The Court’s classification could have implications for many businesses. Multinational groups should review how transfer pricing adjustments currently interact with VAT and whether the judgment gives rise to any need for action. The ECJ’s findings on the uncertain nature of the provision of payment and the need for further evidence to support input VAT deduction are also relevant beyond the context of transfer pricing.