Formation and Operation of VAT Groups in Poland after January 1, 2023

Abstract

The subject of the study are issues of creation and of functioning VAT group, including the issue of taxation of activities performed within this group. The possibility of joint settlement of tax on goods and services currently functions in many European Union countries, but in the Polish legal system it is a completely new institution and the regulations implementing it will come into force on January 1, 2023. Due to the fact that VAT is a harmonized tax, an analysis was also made about the regulation of VAT groups in terms of EU law with reference to the case law of the Court of Justice of the European Union. Creation of VAT groups by Polish taxpayers is optional and it is necessary that there are economic, organizational and financial links between the taxpayers included in the VAT group during the creation and operation of the group. The supply of goods and the provision of services by a member of the VAT group to another member of the same group is not subject to taxation, which results in complete neutrality of intra-group transactions. In transactions with external entities, the VAT group acts as a single taxpayer, and all its members settle accounts jointly.