On January 22, 2026, the European Court of Justice (ECJ) issued
a landmark ruling in joined cases C‑379/24 and
C‑380/24, addressing the scope of the VAT exemption for
cost-sharing groups under Article 132(1)(f) of the EU VAT Directive
1. The decision provides long-awaited clarity on how
broadly this exemption should be interpreted, particularly in
relation to general support services such as cleaning, IT, and
administration and sets important boundaries on how Member States
may apply the "distortion of competition" provision.
The ruling has immediate implications for public interest
sectors across the EU, especially in Spain, Germany and the
Netherlands, where national laws and administrative practices have
historically taken a narrow view of the exemption. For tax-exempt
entities in healthcare, education, and social services, the
judgment opens the door to more flexible and VAT-efficient
collaboration models.
