Parliament approves new VAT group regime

Parliament today approved, in its specialty, a government bill that creates a VAT group system for economic groups to consolidate the tax amounts to be paid or recovered from the State.

In today's vote in the Budget, Finance, and Public Administration Committee, the initiative received votes in favor from the PSD, CDS-PP, and Chega. The PS abstained.

The proposal from Luís Montenegro's (PSD/CDS-PP) government introduces the VAT group regime, "which consists of the consolidation of VAT balances to be paid or recovered by members of a group of entities, united by financial, economic and organizational ties", according to the proposal that was submitted to parliament on August 29.

The new model is aimed at companies that belong to the same economic group, based on "the consolidation of tax balances to be paid or recovered by members of a corporate group."

To achieve this, companies must be linked to each other "by close financial, economic and organizational ties," the Government states in the explanatory memorandum for the proposed law.

According to the explanation of the initiative, the consolidation takes place “in a VAT declaration made available by the Tax and Customs Authority and confirmed by the member of the group considered to be the dominant entity [the parent company of the economic group]”.

In the proposal, the executive notes that the group's companies "continue to submit their respective periodic declarations, determining their respective balance, creditor or debtor, which is then revealed in the group's declaration."

“The consolidation thus carried out does not affect the normal functioning of the activities of the taxable persons belonging to the group for VAT purposes, who will continue to pay tax on their active transactions and deduct tax on their passive transactions, whether these occur between themselves or with third parties,” the initiative further explains.

When drafting the proposal, the executive says it took into account the “experience acquired in the taxation of corporate groups” in the IRC and “the contributions obtained within the scope of the Large Taxpayers Forum”, a dialogue group between the Tax and Customs Authority (AT) and the largest national companies.

The initiative was approved in its entirety on September 19th. At the time, it received votes in favor from the PSD, CDS-PP, Chega, and IL. The PS, Livre, PAN, and JPP abstained, while the PCP voted against.

Parliament today approved, in its specialty, a government bill that creates a VAT group system for economic groups to consolidate the tax amounts to be paid or recovered from the State.

In today's vote in the Budget, Finance, and Public Administration Committee, the initiative received votes in favor from the PSD, CDS-PP, and Chega. The PS abstained.

The proposal from Luís Montenegro's (PSD/CDS-PP) government introduces the VAT group regime, "which consists of the consolidation of VAT balances to be paid or recovered by members of a group of entities, united by financial, economic and organizational ties", according to the proposal that was submitted to parliament on August 29.

The new model is aimed at companies that belong to the same economic group, based on "the consolidation of tax balances to be paid or recovered by members of a corporate group."

To achieve this, companies must be linked to each other "by close financial, economic and organizational ties," the Government states in the explanatory memorandum for the proposed law.

According to the explanation of the initiative, the consolidation takes place “in a VAT declaration made available by the Tax and Customs Authority and confirmed by the member of the group considered to be the dominant entity [the parent company of the economic group]”.

In the proposal, the executive notes that the group's companies "continue to submit their respective periodic declarations, determining their respective balance, creditor or debtor, which is then revealed in the group's declaration."

“The consolidation thus carried out does not affect the normal functioning of the activities of the taxable persons belonging to the group for VAT purposes, who will continue to pay tax on their active transactions and deduct tax on their passive transactions, whether these occur between themselves or with third parties,” the initiative further explains.

When drafting the proposal, the executive says it took into account the “experience acquired in the taxation of corporate groups” in the IRC and “the contributions obtained within the scope of the Large Taxpayers Forum”, a dialogue group between the Tax and Customs Authority (AT) and the largest national companies.

The initiative was approved in its entirety on September 19th. At the time, it received votes in favor from the PSD, CDS-PP, Chega, and IL. The PS, Livre, PAN, and JPP abstained, while the PCP voted against.

Parliament today approved, in its specialty, a government bill that creates a VAT group system for economic groups to consolidate the tax amounts to be paid or recovered from the State.

In today's vote in the Budget, Finance, and Public Administration Committee, the initiative received votes in favor from the PSD, CDS-PP, and Chega. The PS abstained.

The proposal from Luís Montenegro's (PSD/CDS-PP) government introduces the VAT group regime, "which consists of the consolidation of VAT balances to be paid or recovered by members of a group of entities, united by financial, economic and organizational ties", according to the proposal that was submitted to parliament on August 29.

The new model is aimed at companies that belong to the same economic group, based on "the consolidation of tax balances to be paid or recovered by members of a corporate group."

To achieve this, companies must be linked to each other "by close financial, economic and organizational ties," the Government states in the explanatory memorandum for the proposed law.

According to the explanation of the initiative, the consolidation takes place “in a VAT declaration made available by the Tax and Customs Authority and confirmed by the member of the group considered to be the dominant entity [the parent company of the economic group]”.

In the proposal, the executive notes that the group's companies "continue to submit their respective periodic declarations, determining their respective balance, creditor or debtor, which is then revealed in the group's declaration."

“The consolidation thus carried out does not affect the normal functioning of the activities of the taxable persons belonging to the group for VAT purposes, who will continue to pay tax on their active transactions and deduct tax on their passive transactions, whether these occur between themselves or with third parties,” the initiative further explains.

When drafting the proposal, the executive says it took into account the “experience acquired in the taxation of corporate groups” in the IRC and “the contributions obtained within the scope of the Large Taxpayers Forum”, a dialogue group between the Tax and Customs Authority (AT) and the largest national companies.

The initiative was approved in its entirety on September 19th. At the time, it received votes in favor from the PSD, CDS-PP, Chega, and IL. The PS, Livre, PAN, and JPP abstained, while the PCP voted against.