Germany: Ownership of majority voting rights as requirement to form VAT fiscal unity (CJEU judgment)
A CJEU judgment concerning ownership of majority voting rights to form VAT fiscal unity
A CJEU judgment concerning ownership of majority voting rights to form VAT fiscal unity
The Court of Justice of the European Union (CJEU) held that the requirement under German law to form a fiscal unity for value added tax (VAT) purposes that a parent company, in addition to a majority interest in a company's capital, possess the corresponding voting rights, is not a necessary and appropriate measure to prevent abuse and to combat tax evasion as allowed under the EU VAT Directive.
The case is: C‑141/20
Background
The EU VAT Directive allows member states to designate legally independent persons established within their territory as one taxable person (fiscal unity), provided that those persons are closely intertwined from a financial, organizational and economic point of view. Member states may take additional measures that are necessary to prevent abuse and to combat tax fraud and evasion.
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