Under Spanish VAT law, the concept of VAT grouping is recognized in accordance with Article 11 of the EU VAT Directive (Council Directive 2006/112/EC). However, a notable distinction in Spain’s approach lies in the requirement for each individual entity within a VAT group to maintain its own VAT registration.
While the group itself receives a unique Spanish tax identification number (NIF), each member retains its individual NIF specifically for VAT obligations. It’s important to note that the formation of a VAT group in Spain does not treat its members as a single taxable entity, as is the case in some other EU countries. Consequently, transactions between group members are subject to standard VAT rules and do not enjoy exemption within the group framework. Each entity remains accountable for its own VAT compliance.
Fortunately, Spanish VAT law does introduce administrative ease, allowing for the consolidation of VAT payments or refunds into a single transaction managed by the representative of the VAT group, which can significantly enhance efficiency and improve cash flow for businesses.
Upcoming Changes: 1 January 2025 REGE VAT Group Rules
Starting from 1 January 2025, a new VAT regime for groups of companies, known as the Special VAT Regime for Groups (Régimen Especial de Grupos de Entidades or REGE), will come into effect in Spain. Entities choosing to adopt this new regime must notify the tax authorities by submitting Form 039. This form will also cover any requests for participation changes, waivers, or the election of the advanced REGE arrangement along with the monthly VAT refund system. Additionally, companies must provide a detailed list of all group members, noting any alterations from the previous tax year.
Moving forward, businesses will need to use Form 036 or Form 037 to communicate their application for, or withdrawal from, the special cash accounting regime for VAT from 2025 onward. These forms will also accommodate notifications for other special tax regimes, including waivers for simplified taxation as well as the specific regime for agriculture, livestock, and fisheries.
Taxpayers may utilize these forms to choose particular methods for calculating tax bases within special VAT schemes. As part of compliance with electronic record-keeping and reporting requirements, companies with an annual turnover surpassing €6,010,120 in 2024 will be obligated to implement the immediate supply of information (Suministro Inmediato de Información or SII) system starting 1 January 2025.
Such entities must inform the Spanish Tax Agency of their designation as a large enterprise either by the end of January 2025 or when filing their first periodic VAT return for the year. Understanding EU VAT Group Rules In alignment with the EU VAT Directive Article 11 of Directive 2006/112/EC, Poland has also embraced the VAT grouping scheme. For a group’s entities to be treated as one taxable person, they must be closely linked on financial, economic, and organizational levels.
This generally necessitates at least 75% share control among the participating companies, along with shared management or unified business objectives. It’s common for a group member to provide goods or services primarily consumed by other members.
Additionally, Poland expects that one designated member of the group will handle the responsibility for filing the consolidated VAT return. By staying informed about these VAT regulations and upcoming changes, businesses can effectively manage compliance and capitalize on any beneficial provisions.
