VAT Group

As a result of the amendment of VAT regulations as part of the Polish Deal [Polski Ład], taxpayers will gain the opportunity to establish a VAT group allowing them to submit joint settlements for VAT purposes.

Thanks to this solution group entities may become one taxpayer for VAT purposes, and thus settlements between them (resulting from supply of goods or provision of services) will no longer generate the necessity of VAT taxation.

VAT group may therefore constitute a major simplification, a concept worth considering.

For whom?

The solution may be attractive to the majority of VAT payers (regardless of their size and revenues) who want to simplify settlements of mutual performances between entities in the group.

However, it is important that the entities have their registered office in the territory of Poland (or possibly a branch located here) and that they are financially, organizationally and economically connected with one another.

Benefits

In principle, a VAT group offers neutrality of trade between its members and in the case of group structures where one of the members carries out an activity exempt from VAT, settling VAT within a VAT group may additionally bring about measurable VAT savings related to input tax deduction.

Consequently, group settlements may become simpler as they will no longer require split payment (freezing the VAT amount in the VAT account) or involve the risk of over-valuation of turnover if non-market prices are applied. For some taxpayers, the reduction of VAT settlement and reporting obligations may also be an advantage (a VAT group submits one JPK_VAT (SAT-F) structure on behalf of all its members).

How can we help you?

Undoubtedly, establishing a VAT group may be an attractive solution worth considering. However, before registering it with the authorities, it is worth analysing in detail all pros and cons of such a solution. Therefore, we offer you our support in this respect:

  • verification of potential financial benefits from the neutrality of settlements between entities within the group (financial simulation),
  • preparation of the group for single VAT reporting, invoicing methods, transaction documentation, proper communication with counterparties, amendments to contracts,
  • implementation of processes that will ensure correct and safe use of the VAT group solution (records within the group, calculation of proportions for given entities, principles of responsibility, internal settlements, preparation of applications for advance tax rulings).

Feel free to contact us

Tomasz Michalik

Partner | Tax adviser | Head of the VAT Practice
E: tomasz.michalik@mddp.pl
T: (+48) 501 733 720

Magdalena Jaworska

Senior Manager | Tax Advisor | Attorney at Law
E: magdalena.jaworska@mddp.pl
T: (+48) 698 693 169