On 22 January 2026, the Court of Justice ruled in Joined Cases C-379/24 and C-380/24 on the VAT exemption for independent groups of persons in Article 132(1)(f) of the VAT Directive.
The case
Two Spanish groups provided cleaning services to their members. One was an economic interest group for healthcare and social care facilities. The other was a Catalan cooperative for educational establishments. Both used third parties to manage the staff.
After inspections, the Spanish tax authority charged VAT. It found, among other things, that cleaning was not directly and exclusively linked to the members' exempt activity.
The ruling
Directly necessary services. National rules cannot exclude services from the exemption because they are general in nature and not exclusively linked to the exempt activity. Services that are necessary for that activity can qualify, even if they could also be used for other activities.
Distortion of competition. National law cannot assume, as a matter of principle, that such general services distort competition. Distortion is likely in the case of abuse, but that cannot rest on a general and irrebuttable presumption.
The purpose of the exemption is to spare an entity from VAT when it finds it necessary to cooperate with others through a common structure.
What to check
- Hospitals, schools and other exempt organisations can look at shared support services again, including those that are not specific to their sector.
- The other conditions remain. The members must carry on an exempt activity, and the group may only claim exact reimbursement of their share of the joint expenses.
- The ruling does not settle the separate point that these groups relied on outside companies to manage the staff.
mr. J. el Khalfioui LL.M.