The End of Cost Sharing as We Know It?

Two recent Opinions of the ECJ’s AG Kokott seem to herald the end of the cost sharing exemption as we know it. In her recent Opinions in Aviva and DNB Banka AG Kokott indeed endorses a limited scope of application for the exemption provided for in article 132(1)(f) of the VAT Directive. For many VAT practitioners, and also for Member States and the European Commission, this interpretation will come as a surprise. Moreover, in an even more recent Opinion in Commission v. Germany, AG Wathelet contradicts some of AG Kokott’s findings and instead advocates a broad scope for the exemption. It is now up to the ECJ to decide, but should the ECJ concur with AG Kokott, the current use of the cost sharing exemption is up for a thorough revision.