The VAT group

In accordance with Article 256 C of the French Tax Code, companies subject to VAT that are closely linked financially, economically, or organizationally can request to be treated as a single taxable entity for VAT purposes.

The VAT group regime applies to all sectors of economic activity. The regime may be of interest to all companies as it will lead to a simplification of VAT reporting obligations.

Companies eligible to opt for the VAT group regime are those:

– that are subject to VAT,

– that have their economic activity’s headquarters in France or a permanent establishment, or, failing that, their domicile or habitual residence, excluding permanent establishments of these taxpayers not located in France,

The option for the VAT group regime is made by the group’s representative, designated by its members, with the tax authorities of the businesses to which it belongs. The option must be made before October 31 of the preceding year. The option takes effect from January 1 of the following year and is valid for a period of three years.

The VAT group regime can be a fiscal opportunity for businesses as it allows them to optimize their VAT management and can, in certain cases, create a fiscal leverage effect.

A VAT specialist lawyer will help you better understand the opportunities of creating a VAT group and can assist you in the annual declarative follow-up of the VAT group.