Comments on T-575/24: Belgian commissioned association subject to VAT

The ECJ ruled in the Digipolis case (T-575/24) that a public law association providing telematics services to its member cities and third parties, for a consideration covering its costs, qualifies as a VAT taxable person, even if it doesn’t aim for profit.
The Court determined Digipolis conducted a continuous, independent activity for consideration, similar to private entities, and did not act as a public authority exercising public prerogatives, despite its public law status and limited autonomy due to its founders.
The judgment rejects the Belgian “theory of emanation,” which treated services between such public associations and their members as internal and not subject to VAT, affirming that the EU VAT Directive does not allow for such an exclusion.

The Court ruled that Digipolis, a public legal entity established as a commissioned association to provide telematics services and computer equipment to its members, is subject to VAT for the services rendered between 2014 and 2020.
Founded in 2003 by Belgian cities, Digipolis expanded its membership in 2010 to include other entities involved in general interest activities, and it will be succeeded by AG Digipolis Antwerp and AG District09 in 2020.
The Court emphasized that the VAT liability exists regardless of how Belgium classifies the services, as Digipolis independently conducts an economic activity and provides services for consideration, meaning the status of its members does not exempt the association from VAT obligations.