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General Court – T-268/25 (Sampension Livsforsikring) – Questions – Ownership requirement for VAT grouping

 


Summary

  • Facts of the Case: The case involves a dispute between Sampension Livsforsikring A/S, a customer-owned insurance company in Denmark, and the Danish Ministry of Taxation. The issue revolves around the interpretation of Article 11 of Council Directive 2006/112/EC on the common system of value-added tax (VAT), specifically its implementation in Denmark’s VAT law, which requires 100% ownership for joint VAT registration.
  • Key Legal Questions: The Østre Landsret (High Court of Eastern Denmark) referred questions to the Court of Justice of the European Union (CJEU) regarding whether Article 11 of the VAT Directive allows Member States to impose a 100% ownership requirement for joint VAT registration, and if not, whether Sampension Livsforsikring A/S can claim joint registration directly based on Article 11.
  • Decision by Danish Authorities: The Danish Tax Agency rejected Sampension Livsforsikring A/S’s request for renewed joint VAT registration with Administrationsselskab, as Sampension no longer owned 100% of Administrationsselskab. This decision was upheld by the National Tax Tribunal, which stated that the 100% ownership requirement was not met and that Article 11 does not have direct effect.
  • Questions to the Court:
    1. Does Article 11 of the VAT Directive, read with its second paragraph, preclude national legislation from imposing a 100% ownership requirement for joint VAT registration?
    2. If so, does Article 11 allow taxable persons to claim joint registration directly when national law does not comply with the directive?
  • Justification for Decision: The Østre Landsret (High Court of Eastern Denmark) found that there is sufficient doubt about the interpretation of Article 11 of the VAT Directive in this context. The court seeks clarification from the CJEU on whether Denmark’s requirement for 100% ownership is compatible with EU law and whether Sampension Livsforsikring A/S can claim joint registration directly under Article 11 if national law is non-compliant.

Article in EU VAT Directive

Article 11 of the EU VAT Directive 2006/112/EC.

Article 11
After consulting the advisory committee on value added tax (hereafter, the ‘VAT Committee’),each Member State may regard as a single taxable person any persons established in the territory ofthat Member State who, while legally independent, are closely bound to one another by financial,economic and organisational links.
A Member State exercising the option provided for in the first paragraph, may adopt any measures needed to prevent tax evasion or avoidance through the use of this provision.


Facts & Background

  • Parties Involved:
    • Applicant: Sampension Livsforsikring A/S, a customer-owned insurance company in Denmark, engaged in life insurance and various financial services, including labor market and company pensions.
    • Defendant: Skatteministeriet (Ministry of Taxation, Denmark).
  • Legislative Context:
    • The dispute revolves around the interpretation of Article 11 of Council Directive 2006/112/EC regarding the common system of value-added tax (VAT). This directive has been implemented in Denmark through Paragraph 47(4) of the Danish VAT law (momsloven).
  • Background of the Dispute:
    • Prior Structure: Until January 1, 2017, Sampension Livsforsikring A/S was part of a VAT group with Sampension Administrationsselskab A/S, which managed various administrative tasks for Sampension and two other pension funds not included in the group.
    • Change in Ownership: In late 2016, Sampension Livsforsikring A/S allowed two pension funds to acquire a 3% stake in Administrationsselskab, resulting in Sampension no longer owning 100% of the shares. Consequently, the VAT group ceased to exist as it no longer met the 100% ownership requirement under Danish law.
  • Request for Joint Registration:
    • On January 15, 2019, Sampension Livsforsikring A/S requested permission from the Danish Tax Agency to be re-registered as a joint VAT group with Administrationsselskab, arguing that the 100% ownership requirement was inconsistent with EU law, particularly Article 11 of the VAT Directive.
    • At the time of the request, Sampension owned 94% of Administrationsselskab.
  • Decisions by Tax Authorities:
    • The Danish Tax Agency rejected the request on February 8, 2019, citing the lack of 100% ownership. This decision was upheld by the Landsskatteretten (National Tax Tribunal) on December 13, 2021, which ruled that the requirement of full ownership was not satisfied and that Sampension could not rely directly on Article 11 of the VAT Directive as it does not have direct effect.
  • Referral to the Court:
    • Sampension Livsforsikring A/S appealed the decisions to the Retten i Lyngby (Lyngby District Court), which subsequently referred the case to the Østre Landsret (High Court of Eastern Denmark) due to the case raising significant legal questions regarding the interpretation of EU VAT law.
  • Current Ownership Structure:
    • The ownership of Sampension Administrationsselskab A/S currently includes Sampension Livsforsikring A/S (88%), along with minority stakes held by other pension funds.

The background of this case is crucial for determining the compatibility of national VAT regulations with EU law and the implications for VAT group registrations, especially concerning ownership requirements.


Questions

(1) Is the first paragraph of Article 11 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, read in conjunction
with the second paragraph thereof, to be interpreted as precluding legislation of a Member State, such as that at issue in the present case, under which eligibility for creating a VAT group comprising persons not engaged in activity subject to registration or not engaged in economic activity subject to the condition that one
person in the VAT group directly or indirectly owns 100% of the other person or persons in the VAT group?
(2) If question 1 is answered in the affirmative, does Article 11 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value  added tax then have direct effect in the Member States, with the result that taxable persons are entitled, vis-à-vis a Member State, to be registered as a VAT group in cases where the legislation of that Member State does not comply with that provision and cannot be interpreted in accordance therewith


Source


Other ECJ cases referred to


See also



 

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