VAT Group: a single heading for invoices to third parties

Simonetta La Grutta Simonetta La Grutta

The Ministerial decree containing implementing provisions on VAT Group was published on 10 April 2018.

The VAT Group is a single VAT taxable entity set up by VAT taxable persons established in the territory of the State, which carry out a business activity, trade or profession and between which there are financial, economic and organizational relationships as defined under art. 70-ter of Presidential Decree no. 633/72 since 1st July of the year preceding that in which the option becomes effective.

The fact of being a unique taxable entity mainly implies that:

  • persons belonging to the VAT Group lose their independence for VAT purposes, even though they keep it for the purposes of other taxes;
  • only supplies of goods and services performed between the VAT Group and third parties are relevant for VAT purposes, while transactions between parties belonging to the VAT Group are not relevant.

The VAT Group, which will be effective starting from 1st January 2019, is aimed at simplifying administration procedures in case of frequent intercompany transactions and leads to a decrease in charges arising from the non-deductibility of VAT provided for intercompany transactions where the buyer is a taxable person carrying out mainly VAT-exempt activities.

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