On 16 May 2024, the European Court of Justice (ECJ) published the opinion of advocate general Mr Athanasios Rantos on the request for a preliminary ruling by the Bundesfinanzhof (Federal Finance Court, Germany), regarding the taxability of internal transactions within VAT groupings.
In a nutshell, the advocate general’s opinion states that:
· supplies of services between legally independent persons, but closely bound to one another by financial, economic and organisational links, forming part of a group, do not fall within the scope of value added tax (VAT), even where the recipient of the supply of goods or services is not (or is only partly) entitled to deduct input VAT.
The opinion goes in the direction of disfavouring an unjustified and detrimental change in the working of VAT grouping, as previously highlighted by Insurance Europe .
Insurance Europe