In Infohos (C-400/18), the Court ruled that Member States cannot make the availability of the cost sharing exemption restricted to those groups which only provide services to their own members. Infohos is an association established to provide IT services to a group of Belgian hospitals. Belgian law provided that, as Infohos had provided services to non-members, it was not entitled to the benefit of the cost sharing exemption, with the consequence that provision of services to its members were subject to VAT. The question was whether the national tax authority was allowed to make the exemption conditional on the group providing services exclusively to members of the group.
The Principal VAT Directive says that conditions can be imposed for the purpose of ensuring the correct and straightforward application of the exemption and to prevent possible evasion, avoidance or abuse. The Court agreed with the Advocate-General that refusing a cost sharing group the benefit of the exemption simply because it also provides services to non-members would have the effect of imposing a general limitation on the scope of the exemption and would establish a general presumption as to the existence of a distortion of competition without specifically identifying the type of abuse. This type of general limitation has been clearly held to be outside the scope of what Member States may impose in the name of preventing evasion, avoidance or abuse.