VAT tax groups – new term

The content of the new law on the automation of handling specific matters by the National Revenue Administration changes the entering of VAT groups into force from 1 July 2022 to 1 January 2023.

What is a VAT group?

Pursuant to Article 2 of the VAT Act, a VAT group is a group of entities with financial, economic and organisational associations that are registered as taxpayers.

Article 15a of the VAT Act states that a VAT group may be formed by taxpayers in the event of:

• having their registered office located within the territory of the country, or
• not having their registered office located within the territory of the country, to the extent to which they conduct business activity in the territory of the country through a branch located within the territory of the country in question.

VAT group invoicing – what should you pay attention to?

When a VAT group becomes an active VAT taxpayer and thus acquires a separate tax identification number, then any invoice issued to an individual member for VAT purposes will be issued to the VAT group.

If the members of the group form a VAT group only, then they will account for the transaction for VAT as a VAT group and for income tax separately.

It is required for the invoice to indicate the data of the VAT group in question. The regulations do not exclude additional data of the recipient, i.e. entity A, being a member of the VAT group itself. It may seem that such action is to be justified as for income tax purposes it is necessary to indicate a specific entity.

VAT group – who benefits the most from it?

– groups of related entities that include entities with output VAT and entities with excess input VAT. In such scenario, the entities in the group may compensate each other in a common VAT settlement.

– groups of entities that make numerous settlements within the said group in which they disclose VAT.

Legal bases:
– Act of 11 March 2004 on Value Added Tax (consolidated text Journal of Laws of 2022, item 931 as amended)