The Court of Justice of the European Union (CJEU) ruled that Spain cannot impose a stricter “directly and exclusively” requirement on VAT exemptions for services supplied by independent groups of persons. The decision clarifies that services must be directly necessary for the exempt activity, but exclusivity is not required, allowing general services such as cleaning to qualify. The ruling also states that competition distortion must be assessed on a concrete basis, not presumed.
The CJEU ruled that the VAT Directive does not require services to be used “directly and exclusively” for the exempt activity; exclusivity is not a necessary condition for the exemption.
General services such as cleaning can be regarded as directly necessary for the exempt activity in sectors like healthcare and education, according to the CJEU decision.
The ruling states that distortion of competition is not presumed; it must be assessed on a concrete basis and cannot be automatically denied.
Spanish legislation that imposes a stricter “directly and exclusively” requirement is now considered incompatible with the VAT Directive and must be reassessed.
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Seeburger · 1 day ago
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