In Finanzamt T II v S (Case C184/23) (11 July) the CJEU held that supplies between members of an EU VAT group were outside the scope of VAT irrespective of whether the effect of VAT grouping was a ‘loss of tax’.
The taxpayer (S) was the controlling company of a university medical department and another company (U). They were all included in a German VAT group.
U provided various services to S including cleaning laundry and passenger transport in respect of the university medical department building. The building was used for a mixture of taxable business activities and non-economic teaching activities.
Initially the German tax authorities took the view that U’s services were not subject to VAT as they were supplied within a VAT group. However it also argued that where the services were carried out in respect of the non-economic teaching activities a deemed supply of services arose since they...
