H21. Cost sharing

- Independent group of persons is a taxable person in its own right

"[61] As a preliminary point, it should be noted that it follows from the exemption provided for in Article 132(1)(f) of Directive 2006/112 that the IGP is a taxable person in its own right, separate from its members. It is clear from the very wording of that provision that the IGP [independent group of persons] is independent, and that it therefore carries out its supplies of services independently, within the meaning of Article 9 of Directive 2006/112..." (Commission v. Luxembourg C-274/15)

- Acquisition of supplies by member of IGP in member's own name but on behalf of IGP involves supply to and by that member

"[83] It follows that the allocation to the IGP, by one of its members, of expenses incurred by that member in his name but on behalf of the IGP is a transaction which falls within the scope of VAT.

[84] That finding is confirmed by Article 14(2)(c) and Article 28 of Directive 2006/112, provisions which the Commission claims have been infringed under the third ground for complaint.

[85] Article 28 of Directive 2006/112 provides that where a taxable person acting in his own name but on behalf of another person takes part in a supply of services, he is to be deemed to have received and supplied those services himself." (Commission v. Luxembourg C-274/15)

- Service must be directly necessary for exempt activities or outside the scope activities

"[51] According to the wording of Article 132(1)(f) of Directive 2006/112, under certain conditions, the supply of services by independent groups ‘of persons, who are carrying on an activity which is exempt from VAT or in relation to which they are not taxable persons’ for the purpose of rendering their members the services ‘directly necessary for the exercise of that activity’ is to be exempt. Consequently, it follows from the wording of that provision that it does not provide for an exemption for the supply of services which are not directly necessary for the exercise of an IGP’s members’ exempt activities or those in relation to which they are not taxable persons." (Commission v. Luxembourg C-274/15)

- Services supplied to person who carried on mixed activities exempt insofar as directly necessary for exempt/outside the scope activities

"[53] Contrary to what the Grand Duchy of Luxembourg contends, that interpretation of Article 132(1)(f) of Directive 2006/112 does not result in the exemption provided for in that provision being deprived of its intended effect. In particular, the application of that exemption is not restricted to groups whose members exercise exclusively an activity which is exempt from VAT or in relation to which they are not taxable persons. Accordingly, the services rendered by an IGP whose members also carry out taxable activities may qualify for that exemption, but only in so far as those services are directly necessary for those members’ exempt activities or activities in relation to which they are not taxable persons." (Commission v. Luxembourg C-274/15)

- Invoice excludes VAT according to proportion of member activities which are exempt/non-taxable

"[53] Contrary to what the Grand Duchy of Luxembourg contends, that interpretation of Article 132(1)(f) of Directive 2006/112 does not result in the exemption provided for in that provision being deprived of its intended effect. In particular, the application of that exemption is not restricted to groups whose members exercise exclusively an activity which is exempt from VAT or in relation to which they are not taxable persons. Accordingly, the services rendered by an IGP whose members also carry out taxable activities may qualify for that exemption, but only in so far as those services are directly necessary for those members’ exempt activities or activities in relation to which they are not taxable persons." (Commission v. Luxembourg C-274/15)