In a judgement of the Grand Chamber delivered on 9 April, the ECJ has ruled that Ireland's VAT Group rules are not in contravention of the VAT Directive. The case (Case C-85/11) was brought against Ireland by the European Commission which contended that the inclusion of non-taxable persons in a VAT group was in violation of Articles 9 and 11 of Council Directive 2006/112/EC.

VAT grouping is allowed for the purpose of administrative simplification under the VAT Directive, which gives Member States the option to treat those who are legally independent but closely bound to one another by financial, economic and organisational links as one single taxable person. In its judgement, the ECJ noted that there is no requirement for members of a VAT group to be taxable persons in the Articles of the VAT Directive which deal with VAT groups.

For full details on the judgement see the ECJ website