26 (7) of the Value Added Tax Act stipulates that transactions
between persons registered as a value added tax group are not deemed
to be supply. For
example, if production, retail and transport companies belong to the
same group, the transactions between them are not supply in the case
of a VAT group. There is no VAT liability, and no need to pay VAT and
then request it back from the state. At the same time, the commercial
undertakings still operate under their own names in legal terms. In
transactions with third parties, they use their business name and
joint VAT number.
on the Value Added Tax Act (VATA), the tax authority registers
taxable persons as a single taxable person (VAT group) on the basis
of a joint application if they are a parent company and subsidiaries
for the purposes of the Commercial Code. Taxable persons who are
economically and organisationally related are also registered as a
value added tax group on the basis of a joint application if more
than 50 percent of the shares, holding or votes of each company to be
registered within the composition of a VAT group are owned by one and
the same person or the persons are connected on the basis of a
franchise agreement. The previous wording in the VATA was “at least
The VAT group is given a joint taxable person registration number, which the members of the group use in transactions with persons outside of the group. At the same time, the members of the group continue using their business names. Transactions between the members of the group are not deemed to be supply. A representative, who is obliged to submit a VAT return, is elected to communicate with the tax authority. Each member of the group does not submit a separate VAT return to the tax authority. Overpaid VAT is returned to the representative of the group. Every taxable person can only belong to one VAT group.
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