Comments on T-268/25: Danish requirement of 100% interest for VAT grouping contrary to EU law

General Court Rules Denmark’s 100% VAT Group Ownership Condition Breaches EU Law

On 15 July 2026 the General Court delivered its judgment in Case T-268/25 (Sampension Livsforsikring A/S v Skatteministeriet), holding that Article 11 of the VAT Directive precludes national rules requiring 100% ownership to form a VAT group including exempt or non-economic entities, unless justified to combat evasion or avoidance. [eur-lex.europa.eu], [vatupdate.com]
The dispute arose when two pension funds each acquired 3% of Sampension’s wholly-owned management company, breaching Denmark’s 100% ownership requirement under Paragraph 47(4) of the VAT law. The tax authorities consequently refused re-registration of the group, prompting the Østre Landsret to seek a preliminary ruling on compatibility. [vatupdate.com]
Crucially, the Court found Article 11 has no direct effect, so taxpayers cannot rely on it directly against a Member State where national law is incompatible and cannot be interpreted consistently. Commentators note financial integration should require no more than a majority (>50%) shareholding going forward. [vatupdate.com], [vatupdate.com]

Sources:

The CJEU has essentially determined that financial integration for VAT grouping should not require more than a majority shareholding (>50%).
Despite this EU law right, taxpayers may find it difficult to enforce immediately as these provisions do not have direct effect in domestic legal systems.
The Court’s reinforcement that VAT savings are a legitimate feature of grouping regimes is particularly helpful in the UK context, given HMRC’s recent focus on revenue protection.

The General Court ruled that Denmark’s requirement of a 100% interest for forming a VAT group, especially between entities with both VAT-taxable and VAT-exempt activities, is contrary to EU law.
This ruling stems from a case where Danish tax authorities rejected Sampension Livsforsikring A/S’s application to form a VAT group with an affiliated company because it did not hold 100% of the share capital.
An exception to this ruling applies if the 100% interest requirement is a necessary and appropriate measure to combat tax evasion or avoidance.

European Court – T-268/25 (Sampension Livsforsikring) – Judgment – VAT group 100% ownership condition precluded, but no direct effect – VATupdate

General Court Rules 100% Ownership Cannot Be an Automatic VAT-Group Condition (T-268/25)

On 15 July 2026, the General Court (Second Chamber, extended composition) ruled in Case T-268/25 (Sampension Livsforsikring A/S v Skatteministeriet) that Article 11 of the VAT Directive precludes a 100% ownership requirement for VAT groups including exempt or non-economic entities — unless it is a necessary, proportionate anti-avoidance measure. [vatupdate.com], [eur-lex.europa.eu]
The case arose when two pension funds each acquired 3% of Sampension’s wholly-owned management company, breaching Denmark’s 100% ownership rule and prompting refusal of the group’s re-registration. [vatupdate.com], [blogs.pwc.de]
Crucially, the Court held Article 11 has no direct effect, so taxpayers cannot rely on it directly against a Member State where national law is incompatible and cannot be interpreted consistently. [vatupdate.com]

Article: The Court rejected Denmark’s generalising justification that 100% ownership prevents revenue loss and windfall effects, stressing that a mere tax advantage from grouping is not itself evasion or avoidance, and a purely theoretical risk cannot justify an absolute restriction. Commentators note financial integration should require no more than a majority (>50%) shareholding. Sources: EUR-Lex judgment, PwC Germany blog.