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Danske Bank upholds ‘reverse Skandia’: is EU VAT grouping a poisoned chalice?

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For businesses that operate in the EU by using a branch structure the VAT protections offered by the head office to branch disregard (per FCE Bank) in addition to VAT grouping have historically at least gone some way to easing the VAT burden on intra-entity transactions. The CJEU’s judgment in Skandia was the first instalment of eroding these VAT protections but it left many questions unanswered as to how far the principles established in that case should apply. The CJEU had the opportunity to further consider the impact of VAT grouping on branch structures in Danske Bank. Disappointingly however and without the benefit of an advocate general’s opinion it did not fully engage in these technical issues and instead issued a short blunt judgment. In Danske Bank the CJEU considers that if a branch or a head office is in a VAT...

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