VAT Group Registration: the Deadline for an Application’s Filing is Near
If you are thinking about registering related parties as a “group” for the VAT purposes, it is high time to do so. If you file an application by the end of October 2024, the registration will become effective from 1 January 2025. When filed later, the group will only be registered from the beginning of the next year. The same applies for an application for a new member accessing an existing group.
Group constitutes a special grouping of parties related on the basis of capital or on other basis with a locally registered office or an establishment, which is granted the status of an independent VAT payer with its own registration number. Individual members of the group do not have to apply VAT in mutual transactions because such supplies are not subject to VAT.
The group is acting by a representing member provided in the application who files tax returns and receives tax decisions from the tax administrator for the whole group.
A group’s establishing is voluntary, i.e. it is only a question of the involved entities’ decision. All members are subsequently responsible for the group’s duties under tax laws jointly and severally.
The group registration is worth considering for example in situations where certain companies are not fully entitled to a tax deduction but the group registration can also bring tax savings in other cases. Moreover, membership in a group contributes to reducing the administrative burden and can improve the cash flow.
In case you are thinking about the VAT group registration, we recommend considering benefits of such step first, taking implications for the whole group into account. If uncertain, please feel free to contact us. We are ready to assist you in taking the decision.
Michaela Kozminská
kozminska@clarksonhyde.cz
