No VAT group according to AG due to lack of financial interconnectedness

Fiscal Unity Dispute: Advocate General Ettema argues that a group can only be considered to work together as a unit if the parties involved have mutually agreed to exercise financial control collectively and have acted accordingly. This was a central issue in the case regarding X BV, G BV, and M BV, where X BV claimed that they formed a fiscal unity, exempting them from VAT on services provided to M BV.
Shareholding Structure: Messrs Z and I, who are 40% shareholders in X BV and 50% shareholders in G BV, do not hold a majority of shares in X BV. The Arnhem-Leeuwarden Court of Appeal found that this lack of majority shareholding indicated insufficient financial interconnectedness to establish a fiscal unity among the companies.
Conclusion on Financial Control: Advocate General Ettema supports the Court of Appeal’s conclusion that Z and I did not operate as a unit exercising financial control over X BV, as their individual shareholdings prevented them from independently imposing their will on the company. Thus, the appeal from X BV is deemed unfounded, reinforcing the decision that no fiscal unity exists.

Financial Interdependence Requires Legally Enforceable Shareholder Agreements for Majority Control under Dutch VAT Law

The case concerns when “financial interdependence” under art. 7(4) Wet OB can be established, specifically if a cooperating group of shareholders can form a majority interest.
The Advocate General states that a majority interest can be attributed to such a group only if binding agreements exist for joint exercise of control.
Financial interdependence requires that the majority of shares and control are actually in the same hands, proven by enforceable internal agreements.
In this case, the taxpayer failed to prove legally enforceable voting agreements among shareholders during the relevant periods, so financial interdependence is lacking.
Other complaints about legitimate expectations and legal certainty fail, as no promises were made and the law is sufficiently clear.

VAT group