VAT grouping between independent companies who manage the same operational company

Starting on June 1st, 2016 legal entities serving as directors are due to charge VAT on their management fees. However, if the legal entity director and the company in which it acts as such form a VAT group, the management fees will not be subject to VAT. VAT grouping requires companies to have close financial, economic and organisational ties (cf. article 4 VAT code; article 1, §1 R.D. no. 55 dated 9 March 2007 concerning taxable persons who form a VAT group). The condition of close financial ties is met when i) one company holds a direct or an indirect participation of at least 10 percent of the share capital of another company which it wants to form a VAT group with, ii) at least 10 percent of the share capital of the members of the VAT group is held directly or indirectly by the same shareholder or iii) there exists a direct or indirect de facto or de jure control relationship between the members (Circular Letter AOIF no. 42/2007 (E.T.111.702) dated 9 November 2007; VAT Decision no. E.T.127.850 dated 30 March 2016). The question arose whether a VAT group can be formed between several legal entity directors who manage the same operational company, without one holding a participation in the other, or without any control relationship between them. In his decision dated 30 March 2016, the Belgian Minister of Finance stated that a VAT group between the legal entity directors and the operational company is allowed if i) all the legal entity directors are both director and shareholder of the operational company, ii) the legal entity directors collectively hold more than 50% of the voting rights of shares in the operational company and iii) the legal entity directors agree that every decision concerning the orientation of the operational company’s policy is taken in unanimity (VAT Decision no. E.T.127.850 dated 30 March 2016).