3 August 2015

The CJEU has given its judgment in the combined German cases of Beteiligungsgesellschaft Larentia + Minerva GmbH & Co KG (C-108/14) and Marenave Schiffahrts AG (C-109/14). The Court considers that input tax deduction should be allowed in full provided that management charges are intended to be made to a subsidiary which is being acquired.
It also agreed with the Advocate General that VAT grouping should extend to any entity and not just a corporate body, unless a Member State can show that any national restriction is necessary for the prevention of tax evasion or avoidance or an abusive practice. It seems likely that both Germany and the UK will need to amend their VAT grouping rules, as well as other countries which only allow corporate bodies to become members.