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Advocate General Jääskinen released his opinion today in Case C-85/11 EC v Ireland. He has concluded that the practice of permitting non-taxable persons to be members of a VAT Group does not infringe the Principal VAT Directive or any EU principle. The Irish case was heard at the same time as Case C-86/11 EC v UK and other similar infraction proceedings brought by the Commission against the Czech Republic, Denmark, Finland, Sweden and the Netherlands. The European Court asked for only one opinion to be produced ahead of its judgment on the basis that the same point of principle arises in each case. This opinion therefore applies equally to the VAT Act and HMRC’s long-held practice of allowing non-taxable persons to belong to VAT groups. Judgment is expected in 2013. Given the robust and comprehensive opinion of the Advocate General, taxpayers can feel confident of a favourable outcome.
Melanie Hall QC represented the UK in the UK proceedings and intervened in support of Ireland. All UK arguments have been accepted by the Advocate General.
Click to view the judgment in EC v IRELAND
Click here to view our case note.