On 25 February 2026, the EU General Court ruled in Digipolis (T-575/24) that a public-law association supplying ICT services to its own members can be liable to VAT.
The case
Digipolis was set up in 2003 by a number of Belgian cities as a commissioning association. It supplied telematics services and computer equipment to its members and, on an ad hoc basis, to others. From 2010, other bodies joined. The Belgian tax authority took the view that VAT should have been paid on the services to those members in the years 2014 to 2020. Belgian practice had analysed such services as self-supplies by the members.
The ruling
Economic activity. Contributions were fixed annually in advance. They were not meant to produce a profit, but they were meant to cover the costs. That is different from a fee covering only a small part of the costs. The activity also did not lose its economic character because Digipolis did not advertise or canvass the market.
Independence. Digipolis had its own articles of association, registered office, bodies, capital, assets, budget and employees. It was not an internal structure of its members, even though they held all the capital.
No public authority exception. Nothing suggested that it used public powers. Private operators can supply telematics services, so non-taxation could distort competition, and telecommunications are in any event listed in Annex I to the VAT Directive.
The status of the members for VAT purposes does not matter either. What counts is the status and activity of the supplier. The Belgian court must verify the facts.
What to check
- Shared service bodies charging cost-covering contributions are not outside VAT for that reason alone.
- Review whether the supplies are made for consideration and independently. Those are the two conditions the General Court named.
- A long-standing national practice does not settle the question, as this case shows.
mr. J. el Khalfioui LL.M.