VAT fiscal unity with 50/50 shareholders

With a 50/50 split of the shares, the Belastingdienst sees no financial interlinkage, and so no Dutch VAT fiscal unity. There are two routes to a different outcome. The 2024 opinion of Advocate General Ettema concerns a 50% shareholder who can impose his will in practice, and relies on CJEU C-141/20 (a member state may not in principle require a majority of the votes on top of a majority holding). The 2025 opinion builds on the Supreme Court's 1979 judgment (shareholders who cooperate as a unit) and adds that the arrangements must be demonstrable and binding for the shareholders to exercise control as a unit, and that the shareholders actually act on them. The Dutch Supreme Court has not yet decided.

This article is for CFOs, controllers and advisers of groups where two shareholders each hold half. It is general information, not personal advice. Position as of 11 October 2026.

What is the classic rule for financial interlinkage?

For companies with share capital, financial interlinkage exists in any case if the majority of the shares, including the control attached to them, is directly or indirectly in the same hands. At exactly 50% there is no majority. The three forms of interlinkage are also cumulative (article 7(4) Dutch VAT Act 1968).

The Belastingdienst puts it like this: "Enterprises are in any case financially interlinked if more than 50% of the shares, including control over them, of each of the enterprises is directly or indirectly in the same hands." The policy decree on VAT taxable status and fiscal unity (section 3.3.1) follows the same line, and in Supreme Court 18 February 2022, para. 4.2.6 the court held that financial interlinkage must be assumed if at least the majority of the shares, including control, is in the same hands. The difference with the 95% test of the CIT fiscal unity is explained in Interlinkage in the VAT fiscal unity.

For bodies without share capital, such as a foundation, comparable financial control counts. This article is about companies with shares.

The policy decree has one route for shareholders who cooperate (section 3.3.2). If they hold the shares jointly in undivided ownership and exercise their control as a unit, the shares count as being in the same hands. The decree also gives an example in which three companies make voting arrangements but each keeps legal title to its own shares. According to the decree there is then no financial interlinkage. Voting arrangements alone are therefore not enough according to the Belastingdienst.

What did the CJEU decide in Norddeutsche Gesellschaft für Diakonie?

On 1 December 2022 the Court ruled that a member state may in principle not require a majority of the voting rights on top of a majority shareholding to form a VAT group. The judgment concerns the German rules. It does not itself say that 50% is enough.

In CJEU 1 December 2022, C-141/20, ECLI:EU:C:2022:943 (Norddeutsche Gesellschaft für Diakonie) a public body held 51% of the shares in a German limited company without holding the majority of the votes. The German rules required both. The Court treated "close financial links" as a concept of EU law that must not be read that narrowly. In her 2024 opinion the Advocate General at the Dutch Supreme Court reads this as showing that Dutch case law is too strict. That is her reading, not a ruling of the Court.

What did Advocate General Ettema conclude in 2024 and 2025?

In 2024 the AG argued that a 50% shareholder has a sufficient financial link if he can impose his will on the company. In 2025 she argued that shareholders who act as a unit can together hold the majority, provided they have agreed this bindingly and act accordingly. Both are opinions, not judgments.

The opinion of 26 July 2024 (23/00708) concerned a private company whose shares were held 50/50 by two individuals. The district court and the court of appeal refused the fiscal unity on the majority test. The AG advised the Supreme Court to allow the appeal.

The opinion of 12 December 2025 (24/02718)concerned two shareholders with 40% each and a further 20% together through an intermediate holding, so in effect also 50/50. It is the same case as the court of appeal judgment below. According to the AG, the "acting as a unit" criterion in Supreme Court 19 December 1979 is not an exception to the majority requirement but a way to establish that the majority is in the same hands. What counts are the underlying legal relationships: the parties must have agreed to exercise financial control as a unit and must have acted accordingly. Because those agreements were not shown, she advised dismissing the appeal.

Has the Supreme Court ruled yet?

Not as far as we could establish. When we checked rechtspraak.nl on 11 October 2026, we found no Supreme Court judgment in case 23/00708 or case 24/02718. As long as that is so, the classic view remains the Belastingdienst's starting point.

Check this before you take a position: a judgment can appear at any time. Search rechtspraak.nl for case numbers 23/00708 and 24/02718 or for the opinions ECLI:NL:PHR:2024:796 and ECLI:NL:PHR:2025:1356.

What should a 50/50 group document now?

Record that the shareholders exercise their votes as a unit in a binding way, and keep evidence that they act this way from the moment you want to rely on it. The 2025 opinion looks at the underlying legal relationships, and the court of appeal found after-the-fact statements without supporting evidence insufficient (para. 4.9). Note that the court of appeal also found voting arrangements in principle insufficient where legal and economic ownership stay separate (para. 4.10).

Court of Appeal Arnhem-Leeuwarden 11 June 2024, para. 4.9 shows what does not work. A statement from 2019 and a voting agreement from 2023 gave no proof for 2013 to 2016, with no supporting evidence such as emails or minutes. And an arrangement that one shareholder will "of his own accord" follow the other, which he can end, is not a voting agreement.

The policy decree itself accepts one route: bring the legal title to the shares, including the voting rights, into a general partnership (vof) or joint ownership. The shares are then in the same hands and financial interlinkage can be assumed (section 3.3.2, main text and examples 1 and 2). That is the lowest-risk route, but it requires an actual transfer.

In practice, as a starting point for discussion with your adviser:

• Voting agreement: binding, not terminable unilaterally for as long as the fiscal unity is meant to apply, and aimed at the decisions through which control is exercised. Note that with separate legal title the policy decree requires more than voting arrangements (section 3.3.2).
• Articles of association: check that they fit the voting agreement, so both say the same about who decides.
• Deadlock: provide who decides if the shareholders disagree. Without such a rule it is hard to show that control is exercised as a unit.
• Evidence: resolutions, minutes and correspondence from the period itself. The agreement does not work backwards.
• Depositary receipts: take care. If shares are certified and the holder keeps only receipts without voting rights, the policy decree says there is in principle no financial interlinkage anymore. Interlinkage can then still be accepted if the director of the trust office is the same person as the (director of the) holder of the receipts (section 3.3.1).

What is the risk on both sides?

Both misjudgments cost money. If you assume a fiscal unity that does not exist, you invoice internally without VAT where VAT was due, with a risk of an additional assessment. If you assume no unity where there is one, you charge VAT among yourselves that you did not have to charge as a unit. That costs money if the recipient cannot fully deduct that VAT. The inspector cannot treat you as a fiscal unity against your will for a period before the effective date of the ruling (policy decree section 3.6).

The VAT unity arises by operation of law once the interlinkage exists, even without a ruling. The ruling is, however, a condition for joint and several liability (article 43 Collection Act 1990). With a 50/50 structure it is therefore uncertain whether a unity exists. If one of the members is a pure holding, also read Holding company in a Dutch VAT fiscal unity.

When should you request a ruling?

Request a ruling once the binding arrangements are in place and you can substantiate them. The inspector decides by a ruling that can be objected to, so if it is refused you can lodge an objection and put your position before the court.

What the request letter looks like is covered in How to request a VAT fiscal unity. Our VAT fiscal unity tool records the shareholding and control for each member and carries your explanation into the request letter. The tool tests against the rule of more than 50% and flags, for a 50/50 split, that financial interlinkage does not appear to be met. It does not assess your voting agreement; you write that substantiation yourself in the explanation field.

What does C-184/23 mean for internal invoices?

If the unity exists, internal services are not taxed. The Court confirmed this on 11 July 2024 in Finanzamt T II (C-184/23, ECLI:EU:C:2024:599): services for consideration between members of the same VAT group fall outside VAT, even if the recipient cannot deduct the VAT. More in Invoicing between members of a Dutch VAT fiscal unity.

Frequently asked questions

Is a VAT fiscal unity possible with 50/50 shareholders?

According to the Belastingdienst, in principle not, unless the shares are held jointly in undivided ownership and managed as a unit. A wider outcome is conceivable if the shareholders vote as a unit in a binding and demonstrable way, but the Supreme Court has not confirmed that yet.

Is a voting agreement I draw up now enough?

According to the AG in 2025, binding voting agreements can count in some circumstances. The policy decree, however, rejects voting arrangements where legal title stays separate (section 3.3.2, example 2), and the court of appeal found them in principle insufficient in para. 4.10. For earlier periods an arrangement does not count, without proof that the arrangement already existed (Court of Appeal Arnhem-Leeuwarden, para. 4.9).

What if the Supreme Court follows the AG?

Then the test becomes wider than the current policy rule. We do not know whether the Belastingdienst would then change its policy. Keep your file ready.

Does this also apply to the CIT fiscal unity?

No. The CIT unity has its own 95% ownership requirement. The difference is explained in CIT or VAT fiscal unity. The VAT conditions are in Requirements for a Dutch VAT fiscal unity.