- 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.
Source: hub.kpmg.de
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.
