Cost sharing exemption: the end or the beginning?

The lack of clarity over the original purpose of the cost sharing group (CSG) exemption has led to practical difficulties in implementation and a succession of European cases. On 6 October 2016, Advocate General Kokott handed down her conclusions in Commission v Luxembourg (Case C-274/15). If the court agrees with her, the availability of the exemption may be severely curtailed in the UK and other member states. Further uncertainty is likely with more cases in the pipeline. Taxpayers and their advisers need to consider the strength of current arrangements and the feasibility of alternative options to achieve or maintain VAT efficiencies.