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Individuals Can Form Value-Added Tax Groups, Top EU Court Says

April 15, 2021, 2:45 PM

Individuals can be part of value-added tax groups, the European Court of Justice ruled Thursday, striking down German restrictions on the tax-saving device.

The judgment deals a blow to the German government and confirms that VAT groups—in which multiple taxpayers are treated as one and intragroup services are exempt from VAT—are open to partnerships made up of individuals.

The case involved a German firm that claimed it formed a VAT group with another business in which it, alongside various individuals, was a partner. The tax office refused to recognize the grouping on the grounds German law limits tax groups to ...