VAT Grouping in Accounting: Internal Compensation and Bookkeeping at a Glance

• The VAT group (Organschaft) consolidates tax responsibility on the controlling company (Organträger) while maintaining the legal independence of subsidiaries.
• Legally, both the controlling company and subsidiaries are jointly liable to the tax office.
• Internal compensation between the controlling company and subsidiaries is governed by specific legal provisions.
• Clear internal accounting, contractual agreements, and ongoing documentation are essential to ensure VAT neutrality within the group.

Source: datenbank.nwb.de

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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