Germany’s VAT Group Reform: Opt-In Model and New Liability Rules

• The Annual Tax Act plans a major VAT group reform through a new Section 2c of the German VAT Act.
• It will introduce an opt-in system, where VAT group effects apply only prospectively after declaration; no opt-out system is planned.
• The draft adds a new liability rule for both the controlling entity and the subsidiary.
• It also codifies existing principles from tax authorities, the ECJ, and the Federal Fiscal Court, including domestic-only effects and the inclusion of partnerships.
• The current rules will remain in force until 31 December 2028, with the new regime mandatory from 1 January 2029.

Source: taxand.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.

---

---