The Finance Court of Lower Saxony has established that a VAT group also extends to cover the non-economic activity of the controlling company. This means that supplies of services of a controlled company to the non-economic part of its controlling company are not subject to VAT. Furthermore, these transactions cannot be classified as supplies free of charge that are deemed to be subject to VAT. The judgement is not only relevant for the public sector, but also for non-profit institutions and mixed holdings.
Source: kmlz.de
