- Portugal has approved a VAT grouping regime effective July 1, 2026, allowing closely linked companies to be treated as a single taxable entity for VAT purposes.
- To qualify, companies must have strong financial, economic, and organizational links, and commit to the group for at least one year.
- Each group member files its own VAT return, but the tax authority consolidates these into a single group return under one VAT number; the controlling entity is responsible for payments or refunds, and all members are jointly liable.
- The regime aims to improve cash flow and administrative efficiency, but intra-group transactions are not fully disregarded for VAT, and input VAT deduction restrictions may still apply.
- Companies should assess eligibility and update their accounting systems to comply with the new rules.
Source: meridianglobalservices.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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