German VAT Group: BFH Confirms Intra-Group Transactions Outside VAT Scope

The issue of the taxability of intra-group supplies in the context of a VAT group has been of concern to taxpayers for many years. The starting point was the question of whether a VAT group existed between a foundation under public law, which carried out both taxable and non-taxable transactions, and a limited liability company, which provided cleaning services for both the business and non-business areas of the foundation, and whether such supplies were subject to VAT.

The BFH concurred with the ECJ’s prior ruling, affirming the existence of a VAT group and confirming that intra-group transactions among its members are outside the scope of VAT, even in cases where one of the parties, such as the foundation in this instance, is subject to input tax deduction restrictions. The BFH further clarified that the non-business segment of a controlling company falls within the scope of the VAT group.

Source: jdsupra.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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