- Importance of VAT Position in M&A: The VAT status of a fiscal unity is critical during mergers and acquisitions, particularly when the target company is part of a VAT group. It is essential to evaluate how the composition of the VAT group may change post-transaction and to notify tax authorities if necessary.
- Changes in Holding Company Status: The new Tax Liability Decree, effective July 1, 2025, expands the ability of non-taxable (intermediate) holding companies to participate in VAT groups, provided they meet specific interconnectedness criteria. This marks a significant shift from the previous Holding Resolution, allowing for more flexible inclusion of holding companies in VAT groups.
- Addressing the BidCo Problem: The decree offers potential solutions for newly established companies (BidCos) in share transactions. By enabling BidCos with a policy-making role to join VAT groups under certain conditions, it allows for the possibility of VAT deductions on acquisition costs, thus providing a financial advantage in transactions.
Source BDO
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