6 October 2015

A recent Latvian case has been referred to the CJEU, and the referring court asks some very searching questions in relation to cross border issues. There has been discussion at European VAT Committee meetings around some of these points, arising from a Working Paper (No 856) produced by Denmark and published in May 2015.
The referral is DNB Banka’AS Case C-326/15. Amongst more detailed questions, the referring court asks whether the group has to be a separate legal entity, whether there can be such a group if its members belong in more than one Member State and the provisions have been implemented differently (which could result in double taxation or no taxation), whether members can belong in third countries, and whether transfer pricing mark ups might restrict the application.
Judgment is not expected until 2016 at the earliest, but it is hoped that this case will spotlight the practical difficulties involved in using the cost sharing exemption.