Eliminating VAT On Cost-Sharing Recharges

Hidden away among the 'social' exemptions in Article 13.A.1 of the Sixth Directive is a mandatory exemption which has been implemented in most of the Member States (but not the UK). This is beginning to attract attention in the UK as a possible quasi-grouping solution to the problem of manufactured VAT on cost-sharing arrangements between persons involved in joint ventures pursuing exempt or outside-the-scope activities both within Member States and cross-border. Possible beneficiaries include social welfare charities coming together to provide their services universities co-operating in research programmes and even financial institutions outsourcing functions to shared service centres or simply sharing common...