Finance bill for 2021: introduction of an optional TVA group scheme
Article 45 of the draft Finance Act introduces a VAT group scheme as from 1 January 2023 by transposing Article 11 of the VAT Directive. This option will be available regardless of the economic sector and will have the effect of neutralising economic transactions between the members of the VAT group.
This article also brings the exemption scheme for groups of persons into line with European case law by restricting the scheme to taxable or non-taxable persons carrying out activities in the public interest.
Certain conditions must be met in order to benefit from the scheme, namely :
– Only taxable persons who have their registered office, a permanent establishment or their tax domicile or habitual residence in France may benefit from this scheme.
– The entities will have to be closely linked to each other financially, economically and organisationally.
The option should be formulated by the group representative with the agreement of all members. The request must be made no later than 31 October of the year preceding its application and would take effect in the year before. It would therefore cover a period of three years.
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