The Phenomenon of VAT Groups under EU Law and Their VAT-Saving Aspects

What started as the principle that Germany should be enabled to maintain its doctrine of Organschaft, i.e. introduction of VAT grouping, has developed into a complex feature of the EU VAT system, which is being abused by the Member States and by businesses for purposes that are not compatible with the principles of the Community. In 1997, the then 15 Member States did not accept the Commission’s proposal to abolish VAT grouping or limit its scope to members that are entitled to full deduction of input tax. They may, however, reconsider that position if the ECJ would force them to apply the VAT grouping arrangements Unionwide.