Brussels, 20/02/2014 (Agence Europe) - The European Commission is sending Luxembourg to the European Court of Justice over its VAT system for independent groups of persons. Under the VAT directive (2006/112/EEC), certain services supplied by a group to its members are exempt from VAT to avoid making operations downstream more expensive for these members, given that the VAT cannot be deducted. Under Luxembourg law, the services provided by an independent group to its members are free of VAT provided that the members' taxed activities do not exceed 30% (or 45% under certain conditions) of their annual turnover. By setting an upper limit, the European Commission says the VAT system fails to comply with the EU directive, and it also breaks the EU VAT rules by allowing group members to deduct the VAT charged to the group for its purchases of goods and services from third parties. (FG/transl.fl)