Suitability of partnerships as controlled companies

In principle, partnerships in which natural persons hold shares can also be part of a fiscal unity for VAT purposes.

A national provision that systematically excludes all partnerships whose partners include natural persons from the benefits of a fiscal unity for VAT purposes goes beyond what is necessary to prevent abusive tax arrangements. The European Court of Justice is convinced of this and has thus ruled on a request for a preliminary ruling by the Berlin-Brandenburg Tax Court in favor of the plaintiff GmbH & Co. KG. The judges have proposed several alternatives with which the same objective can be achieved without systematically excluding certain partnerships from the VAT group.