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


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.

Read a December 2022 report prepared by the KPMG member firm in the Netherlands


The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 3712, 1801 K Street NW, Washington, DC 20006.