The VAT Group Regime will come into effect in July 2026, introducing a new model for consolidated VAT management within corporate groups.
The regime allows for the centralisation of VAT calculation and reporting through a dominant entity acting on behalf of the group.
This regime allows companies belonging to the same group to consolidate their VAT balances payable and receivable through a dominant entity, which is responsible for submitting the group’s consolidated VAT return.
Entities eligible to join the regime include:
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Companies in a group relationship;
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A dominant entity holding at least 75% of the share capital of its subsidiaries;
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Shareholdings maintained for more than one year.
Under the VAT Group Regime, each participating company remains required to submit its individual VAT return, while the dominant entity is responsible for the consolidated return reflecting the group’s overall VAT position. All companies within the group are jointly and severally liable for the tax due, responding collectively for the group’s fiscal obligations before the Tax Authority.
The main advantages of the regime include improved cash flow resulting from the internal offset of balances, greater administrative efficiency in managing tax obligations, and the possibility of more predictable and integrated tax planning at group level.
However, the regime requires careful assessment, as it entails joint and several liability among group companies, increased reporting complexity, and additional costs associated with system and process adjustments.
