True or False: For a VAT group, effective interest must be greater than 50%.

In the context of VAT groups, the concept of "effective interest" typically pertains to the ownership interests that companies have in one another to form a VAT group. The conditions for forming a VAT group often require that one company must own at least 50% of another company, but the term "effective interest" can vary based on different interpretations and specific regulations.

When answering whether an effective interest must be greater than 50%, it is critical to clarify that it is not strictly about a singular 50% threshold but rather how ownership is defined and the relationships between the companies involved. A VAT group can consist of companies that are under common control or ownership, and various arrangements—like actual control, financial dependencies, or shareholdings—can qualify without necessarily exceeding a 50% interest in a straightforward manner.

Therefore, saying that it must be greater than 50% oversimplifies the requirements for VAT grouping and ignores the specific regulations that may allow for different criteria. This context leads to the understanding that the statement is false, as the effective interest does not have a universally mandated threshold of greater than 50% but can depend on broader interpretations of ownership and control among group members.