The end of VAT exemption for services provided by cost-sharing agreements outside the EU
In a decision dated 18 November 2020, the EU’s Court of Justice ruled that the VAT exemption provided for in Article 132-1 of the VAT Directive does not apply to agreements established outside of the EU, for EU member states.
The VAT exemption for cost-sharing agreements concerns the services that are provided by a group to its members, whereby the group is confined to passing on the exact price of the services to its members. This provision had been transposed by the French state in Article 261 B of the General Tax Code ; it should be noted that the French tax doctrine allows for VAT exemption for the services provided to members by « cross-border » agreements. Thus a change to the Doctrine can be expected on this point.
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