On 15 July 2026, the EU General Court ruled in Sampension (T-268/25) that a Member State cannot simply require 100% ownership for a VAT group with exempt members.
The case
A Danish life insurer formed a VAT group with its wholly owned management company. On 1 January 2017, two pension funds each acquired 3% of that company. Danish law requires full ownership in a VAT group of persons with taxable activities and persons without, so the group ended. A request to restore it was rejected.
The ruling
Article 11 of the VAT Directive allows a group where members are closely bound by financial, economic and organisational links. Full ownership can support a presumption of close links, but it cannot be a necessary condition. Close financial links can also exist below 100%.
A Member State can take measures against evasion or avoidance under the second paragraph of Article 11. But the mere tax advantage of a VAT group is not evasion. Neither is the loss of revenue that follows from the choice to allow VAT groups, and a purely theoretical risk cannot support a general rule. The Danish court must assess whether the condition is necessary and appropriate for that aim, and whether it respects fiscal neutrality.
There is a catch. Article 11 has no direct effect. If Danish law cannot be interpreted in line with it, the taxable person cannot rely on it against the State.
What to check
- Groups kept out of a VAT group by a strict ownership test should review that test against this ruling.
- Check how far national law can be interpreted in line with Article 11. That decides what the ruling is worth in practice.
- Other Member States' conditions can be tested in the same way, since the only conditions in Article 11 are establishment and close links, subject to anti-abuse measures.
mr. J. el Khalfioui LL.M.