- This case builds on the previous Finanzamt T I (C-269/20) decision, which ruled that when a company in a VAT group pays a supplier in the same VAT group for a service, there is no deemed supply.
- This new case raises questions about intra-VAT group transactions for consideration, including whether grouping rules remove them from the scope of VAT, and whether they are still subject to VAT if the receiving group member is not fully taxable.
- The decision states that members of a VAT group are not independent taxable persons, as the group itself is considered a single taxable person, and transactions between group members do not exist for VAT purposes.
- In contrast, UK law recognizes these supplies but disregards them unless specific anti-avoidance conditions are triggered. The decision could have had a groundbreaking impact if it had been made when ECJ decisions were binding on the UK.
Source KPMG
See also
- ECJ C-184/23 (Finanzamt T) – Judgment – Supplies within VAT group are outside scope of VAT even if input VAT is limited
- Roadtrip through ECJ Cases – Focus on ”VAT Grouping” (Art. 11)
- 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
- VATupdate.com – Your FREE source of information on ECJ VAT Cases
