The European Court of Justice (ECJ)’s ruling in the SKF case is a milestone in the development of the doctrine on the VAT treatment of disposals of shares by a ‘controlling active parent company’, such as AB SKF. The first question in this case was whether the disposal of shares was an economic activity and if so, whether it constituted a VAT exempt supply of services. The second question was whether input VAT incurred on costs made in connection to a share disposal can be deducted. Although the ECJ ruled that the disposal of the shares was a VAT exempt supply of services, the ECJ created routes to deduct input VAT on costs related to the disposal of the shares. Focusing on the right to deduction of input VAT, the authors investigate the implications of the ECJ’s judgment and test whether the EC VAT Directive (ECVD) and settled ECJ case law provide solid legal arguments to validate both the outcome and the implications of the SKF case.

The cost-sharing exemption applied in the field of VAT is losing its relevance rapidly as it is becoming clear that it cannot be applied in many sectors of the economy after all. Keywords Cost sharing exemption • Aviva Group case • DNB Banka In a world where global trade is dependent on endless organisational networks, it is common for many businesses to come together, cooperate and pool resources. This contractual cooperation gives businesses certain advantages that are not obtainable by them acting on their own. There is no single way of engaging in such cooperation. Businesses can cooperate in different ways such as pooling certain assets, pooling money (by cash pooling or cost pooling), or pooling personnel. 1 They can also share risks or form new business together by way of a joint venture, a partnership or a European Economic Interest Group (EEIG). 2 Any such contractual agreement has quite an impact in determining the identity of a taxable person for the purposes of value added tax (VAT) as the linking of individual businesses with each other or the creation of a new business might be treated as one single taxable person for the purposes of VAT. 3 The idea that, under certain conditions, a group of individual businesses can 1 Doesum/Kesteren/Norder [3], p. 144. 2 Doesum/Kesteren/Norder [3], p. 144.

A recurrent topic of debate concerns the effects of transfer pricing adjustments for direct tax purposes on the taxable amount for VAT. This topic is currently gaining attention, which is underlined by the recently published VAT Committee working paper on the possible VAT effects of transfer pricing adjustments. Focussing on so-called ‘year-end transfer pricing adjustments’, the authors discuss various fundamental questions concerning the VAT implications of such adjustments. Do year-end adjustments lead to retroactive adjustments to the taxable amounts for VAT of supplies made throughout the year? If any retroactive adjustments need to be made to the taxable amounts for VAT, what are the implications for the VAT returns, EC-Sales lists and interests? What if a year-end adjustment does not lead to an adjustment of the taxable amount for VAT? Can intercompany payments (which follow from year-end adjustments) then be regarded as the remuneration for any service rendered? Or are year-end adjustments merely to be regarded as financial transactions outside the scope of EU VAT after all? These, and other questions are discussed in this article.

Both Germany and the Netherlands were acquainted with the concept of VAT grouping before the introduction of a common EU VAT system in 1968. In this article the authors discuss the requirements for VAT grouping in Germany and the Netherlands. Even though the requirements are similar VAT grouping between companies established in Germany and the Netherlands is not possible, because of the territorial restriction laid down in Article 11 VAT Directive. The objections to a cross-border VAT group including German and Dutch entities as well as the current position of both countries on the subject are examined in this article. The different positions of Germany and the Netherlands on cross-border VAT grouping result in potential situations of double or non-taxation that we will discuss.