Transactions between persons registered as a value added tax group are not subject to VAT, it means that in the case of transactions between persons registered as a value added tax group VAT is neither included in invoices nor declared in VAT returns. For example, if production, retail and transport companies belong to the same group and are registered as a VAT group, the transactions between them are not subject to VAT and therefore no VAT liability. At the same time, the commercial undertakings still operate under their own names in legal terms.

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. Transactions between a taxable person belonging to a VAT group and a person outside the VAT group are deemed to be transactions of the VAT group with that person, so VAT is chargeable according to the general rules and joint VAT number is used.

For more detailed information about the VAT group, please read the article on our Estonian webpage: https://leinonen.ee/news/news-2017/vat-group-represents-a-major-advantage