Comments on EGC T-268/25: Danish requirement of 100% interest for VAT not contrary to EU law according to AG

Sampension Livsforsikring (T-268/25) – Opinion – VAT grouping – Derogation that grouping requires 100% ownership where persons are making exempt or not engaged in economic activity – whether compatible with Article 11 – not clear if taxpayer win or loss?

The case concerns the compatibility of Danish VAT grouping rules with Article 11 of the VAT Directive. Specifically, Denmark requires 100% ownership for VAT grouping when members conduct exempt activities or are not engaged in economic activity, while its general grouping rules do not have this strict ownership requirement.
The Advocate General (AG) opined that the first paragraph of Article 11, which defines “close financial links,” does not support a mandatory 100% ownership condition for forming a VAT group.
Regarding the second paragraph of Article 11, which allows measures to prevent tax evasion or avoidance, the AG suggested that the Danish rule could only be compatible if it genuinely aims to prevent tax advantages (beyond administrative simplification) arising from the VAT group scheme, and if it is proportionate and respects fiscal neutrality, leaving the final determination to the referring court.

Source KPMG

Denmark’s tax authorities rejected an insurance company’s (SL A/S) request to form a VAT group with another company (SA A/S) because SL A/S did not hold 100% of SA A/S’s shares.
Advocate General Brkan concluded that requiring a 100% ownership interest for VAT grouping in certain situations is not against EU law.
However, this requirement is permissible only if its purpose is to prevent tax benefits beyond administrative simplification, and it must also respect principles of proportionality and fiscal neutrality.

Source Taxlive

EGC – T-268/25 (Sampension Livsforsikring) -AG Opinion – 100% ownership rule permissible if proportionate against tax avoidance – VATupdate