Advocate General’s Opinion on VAT Exemption for Cost-Sharing Groups in EU Law

The case involves tax exemption for cost-sharing groups under VAT law.
The Advocate General commented on the condition that the exemption should not distort competition.
The groups were created to provide cleaning services in hospitals and educational establishments.
External companies were contracted to manage cleaning staff and related tasks.
Spanish tax authorities denied the exemption, citing lack of direct service provision by the groups and potential competition distortion.
The plaintiffs appealed, and the case was referred to the Court of Justice for interpretation of the VAT Directive.
The Advocate General stated that services are necessary for exempt activities even if not directly provided by the groups.
The exemption should not disadvantage smaller companies compared to larger ones.
No competition distortion occurs if services are typically part of tax-exempt activities.
Improper application of the exemption includes providing services to non-members or not tailoring services to members’ needs.
The VAT Directive was fully incorporated into German law on January 1, 2020.

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.