Pre-consultation on VAT Groups
Related entities will gain the possibility to create VAT Groups. This is one of the proposals included in the Polish Order. Ministry of Finance finalized pre-consultations of this solution.
VAT Groups will be based on solutions known to entrepreneurs from Tax Capital Groups, which currently operate on the grounds of CIT. What are the benefits of creating VAT Groups?
– According to the announcements of the Ministry of Finance, companies that will form a VAT Group will settle the tax on goods and services jointly. Their individual settlements will disappear. VAT management within the group is to be much more effective. If, before joining the group, a given entity was a taxpayer who regularly had an excess of input VAT over output VAT, then it had to wait for the VAT refund – normally within 60 days. If this entity joins a group which as a whole shows an excess of output tax over input tax then the tax previously shown as VAT to be refunded will be included in the group’s accounts on an ‘ongoing basis’. It may allow for a better use of available resources by entrepreneurs – indicates Andrzej Kapczuk, tax advisor, partner in Thedy & Partners.
VAT groups are to be available for every legal form, including small and medium-sized businesses. In order to check whether it is a good form, CIT groups will test the new system first. It is also important that formation of VAT Groups will be voluntary.