VAT Grouping and the Cost-Sharing Exemption: Similarities, Differences, and their Interaction

Abstract: The present thesis deals with two different provisions in the VAT Directive, the VAT grouping, provided in Article 11 of the VAT Directive, and the cost-sharing exemption, provided in Article 132(1)(f) of the VAT Directive. Both provisions are utilised by businesses in order to alleviate the undesirable consequences of the irrecoverable input VAT. The former establishes the VAT group whose intra-group transactions are not taxable for VAT purposes, while the latter provides for an exemption for services provided by an independent group of persons, the cost-sharing group to its members under certain conditions. The brief wording of both provisions leads to interpretation difficulties, regarding the different aspects of the scope of the latter, which the CJEU and the European Commission try to resolve. In the present thesis, following the legal-dogmatic method, the fundamental aspects of the two concepts are analysed. The research question and the aim of the thesis are, after such an analysis of the two schemes, their similarities, and their differences, as well as their interaction to be presented in a comprehensive way.