On 10 June 2026, the EU General Court answered a question from the Dutch Supreme Court in Cavert (T-444/25). A VAT group can rely on the exemptions for medical care and social work only if the member that provides the service qualifies on its own.
The case
A Dutch VAT group in the care sector included a foundation and a private company. The foundation was recognised as a medical institution and as a body devoted to social wellbeing. The company provided 24-hour services to care institutions, but had no such recognition. The court of appeal assessed the exemption at the level of the VAT group.
The ruling
The exemptions in Article 132(1)(b) and (g) of the VAT Directive apply only where the services are provided to third parties by a member which itself satisfies all the conditions, including recognition by the Member State.
The General Court gave two reasons:
- The conditions are tied to the status of the institution providing the service. Extending them to a member that does not meet them would go against their purpose.
- Fiscal neutrality points the same way. Otherwise the same services would be exempt inside a VAT group and taxed when supplied by an operator outside one.
What to check
- Care groups should test the exemption per member and per service, not at group level.
- Review past assumptions if a company without recognition has been supplying third parties under the group's exemption.
- The Dutch Supreme Court still has to apply this answer to the case.
mr. J. el Khalfioui LL.M.