The European Court of Justice on April 25 held that U.K. rules allowing nontaxable persons to be members of a VAT group comply with the EU VAT Directive. The case, European Commission v. United Kingdom (C-486/11), is one of seven the European Commission referred to the ECJ in 2010 over the implementation of article 11 of the EU VAT Directive. Article 11, which allows member states to adopt national rules permitting related entities to be considered a single entity for purposes of VAT administration, says that grouping is available to "any persons established in the territory of the Member State who, while legally independent, are closely bound to one another by financial, economic and organizational links."
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