The European Court of Justice (ECJ) once again had to deal with the German VAT group for VAT purposes. The focus was on the admissibility of the basic concept of the German VAT group under EC law. Many experts had recognized a significant risk that the ECJ would not accept the German concept, with the possible consequence that the controlling company of the VAT group would have been able to reclaim the VAT assessed against them (involving possible tax reclaims of double-digit billion Euros for each open year). With its remarkable decisions, the ECJ has now, however, confirmed the current German legal regulation, which determines the controlling company of the VAT group as the (sole) taxable person for VAT purposes. The decision of the ECJ indicates however, that other important aspects of the German VAT group are probably not in line with EC law and may therefore require a legal revision. Companies should closely observe the subsequent rulings of the German Federal Tax Court and further developments.
Source Baker & McKenzie
See also
- ECJ C-141/20 (Norddeutsche Gesellschaft für Diakonie mbH) – Judgment – VAT group: Controlling member may be the only representative of a VAT group
- C-269/20 (Finanzamt T) – Judgment – Controlling company may be the only taxable person of a VAT group
Join the Linkedin Group on ECJ VAT Cases, click HERE
For an overview of ECJ cases per article of the EU VAT Directive, click HERE
