- A reform of the VAT “Organschaft” (tax consolidation) is planned in the 2026 Annual Tax Act draft to reduce legal uncertainty.
- Under current rules, an Organschaft exists automatically if financial, economic, and organizational integration are met, which often leads to disputes and risks.
- The reform would keep the basic concept and the three integration criteria, but introduce a new declaration/opt-in procedure with the tax office.
- The parent company would have to declare in advance that an Organschaft should exist; individual subsidiaries could be included, and later loss of conditions would also need to be reported.
- This would eliminate “unrecognized” Organschaften, though “failed” Organschaften would still be possible if the requirements are not actually met.
Source: umsatz-steuer-beratung.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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