Comments on ECJ C-379/24 & C-380/24: VAT exemption for cleaning services provided by a group to members

Clarification of VAT Exemption Scope: Advocate General Kokott determined that the VAT exemption under Article 132(1)(f) of the VAT Directive applies to services used by members as inputs for their exempt activities, emphasizing that these services are essential for carrying out those activities.
Context of the Case: The case involves Agrupació de Neteja Sanitària (ANS) and Educat Serveis Auxiliars (ESA), which provide cleaning services to members in the health and education sectors. The Spanish Tax Agency contends that VAT should apply to these services because they are contracted out to third parties and are not directly linked to the exempt activities, leading to potential competition distortions.
Advocate General’s Position on Competition: Kokott argued that exempting these cleaning services does not inherently distort competition, especially when such services are typically associated with exempt activities. However, he noted that improper application of the exemption could lead to different outcomes, suggesting that careful adherence to the guidelines is essential.