Let us remind you that the deadline for the registration of a VAT group is approaching. The VAT group becomes VAT payer from January 1st, 2019 if the application for VAT registration is submitted no later than October 31st, 2018.
In case that the VAT application is submitted later, the VAT group will be registered for VAT not earlier than January 1st, 2020. The same rule applies for the eventual addition of a new member to the VAT group or exit a member from the VAT group.
The VAT group is a specific group of related companies that is treated as one taxpayer for VAT purposes, i.e. supply provided between members of the VAT group is not subject to VAT. The VAT group registration is commonly used by related companies where there is mutual invoicing and for some reason, it is not possible to claim full VAT deduction. When deciding to create VAT group it is necessary to take into account the nature of the supplies that will be provided by the VAT group as a whole (i.e. to the third parties) and its impact on the potential obligation to shorten the VAT deductions. It is thus important to consider whether the positive effect of VAT group registration will not be outweighed by the negative effect caused by the partial VAT deductions. Every decision to register as a VAT group should be preceded by a specific analysis.