1. Is the second subparagraph of Article 4(4) in conjunction with
Article 21(1)(a) and Article 21(3) of Sixth Council Directive 77/388/EEC of
17 May 1977 on the harmonization of the laws of the Member States
relating to turnover taxes (Directive 77/388/EEC) to be interpreted as
permitting a Member State to designate, instead of the VAT group
(‘Organkreis’, group treated as a single entity for tax purposes), a member of
the VAT group (‘Organträger’, controlling company) as the taxable person?
2. If question 1 is answered in the negative: Can the second subparagraph of
Article 4(4) in conjunction with Article 21(1)(a) and Article 21(3) of
Directive 77/388/EEC be invoked in this regard?
3. Must a strict or lenient standard be applied in the assessment to be carried
out in accordance with paragraph 46 of the Larentia + Minerva judgment of
the Court of Justice of 16 July 2015, C-108/14 and C-109/14
(EU:C:2015:496, paragraph 44 and 45), as to whether the requirement of
financial integration contained in the first sentence of point 2 of
Paragraph 2(2) of the Umsatzsteuergesetz (Law on turnover tax) constitutes
a permissible measure which is necessary and appropriate for attaining the
objectives seeking to prevent abusive practices or behaviour or to combat
tax evasion or tax avoidance?
4. Are Article 4(1) and the first subparagraph of Article 4(4) of Directive
77/388/EEC to be interpreted as permitting a Member State to regard a
person as not being independent within the meaning of Article 4(1) of
Directive 77/388/EEC if that person is integrated into the undertaking of
another undertaking (‘Organträger’, controlling company) in financial,
economic and organisational terms in such a way that the controlling
company is able to impose its will on the person and thus prevent the person
from forming his own will, which diverges from that of the controlling
This is not the only case about the German VAT grouping rules.
In the case C-868/19 – M-GmbH vs. DE the German court has raised questions about whether Germany may allow only legal entities to form part of a VAT group.
More details about that case can be found HERE and an interesting article by BDO about these developments was posted by us earlier HERE
But Germany is not the only country in which VAT group developments have occured.
- Recently, Italy provided Clarification 133: Invoice issued to a VAT group, wrong VAT number indicated
- In the Netherlands, we noticed an article by Flynth about the Coronavirus, and Bankruptcy within a VAT group.
- In Ireland, Guidance issued on VAT groups
- Finally, Primetax.ch posted an article about a recent court case about Retroactive VAT group taxation
For more posts about VAT groups, simply click on the tag below – or press HERE.