Legal persons established in Luxembourg and closely related to each other in financial, economic and organisational terms may opt to be considered as a single taxable person, i.e. a "VAT group".
All transactions, services and supplies of goods between members of a VAT group are in principle not subject to VAT. These types of transactions are considered as internal operations carried out within the same legal entity.
A legal person can be a member of only one VAT group.
The notification of incorporation of a VAT group must be submitted by the group representative to the Registration Duties, Estates and VAT Authority (Administration de l’enregistrement, des domaines et de la TVA - AED).
Who is concerned
To be part of a VAT group, the companies must be:
- established in Luxembourg, and;
- closely linked with each other in the following terms:
- financial: there is a direct or indirect link of control resulting from their relationship (such as a participation in at least 50 % of the capital);
- economic: the companies resort to the use of one or more of the following 3 forms of cooperation:
- the main activity of the members of the group is of the same nature (similar activities); or
- the activities of the members of the group complement each other, influence each other or are part of the pursuit of a common economic objective; or
- the activity of a given member is exercised in whole or in part to meet the needs of the economic activities of the others; and
- organisational: companies that:
- are, in law or in fact, directly or indirectly under joint management; or
- organise their activities in full or partial cooperation with each other; or
- are, in law or in fact, directly or indirectly, under the control of a single person (joint management).
A person can be a member of only one VAT group.
The implementation of the VAT group scheme excludes the simultaneous application of:
- the VAT exemption scheme for small businesses;
- the flat-rate taxation scheme for agriculture and forestry;
The constitution of a VAT group is subject to the condition that all persons, who fulfil the conditions to be part of it, opt for the application of the VAT group scheme. This declaration of option must be made by sending a form by mail to the AED.
However, a person may opt out of the VAT group on the double condition that:
- the waiver of the option does not result or is unlikely to result, for the VAT group or the person who opts out, in VAT savings (a saving which would not have been realised in the absence of the waiver);
- the person does not remain in the economic circuit between the members of the VAT group.
In this case, the company must waive the option for the VAT group scheme in writing and send the duly completed form to the AED by post.
If, after the formation of a VAT group, a company fulfils the conditions for joining this group within 15 days from meeting these conditions:
- the group's representative must declare the entry of this person into the VAT group to the AED; or
- the company must inform the AED of its decision not to be part of the VAT group, subject to fulfilling the conditions of waiver.
If a member no longer fulfils the conditions of membership in the VAT group, the group's representative must declare the member's withdrawal from the VAT group to the AED within 15 days. The 15-day deadline starts on the day when the conditions for being a member in the VAT group are no longer met.
Declarations made to the AED are free of charge.
How to proceed
The VAT group is represented by the member who:
- controls the other members or, failing that;
- has the highest turnover or income.
However, the members may appoint another member, if the latter:
- is objectively better suited to ensure compliance with the legal requirements regarding the membership in the VAT group;
- has unconditional access to the tax-relevant information of the other members, and;
- possesses the necessary resources to carry out this mission on an ongoing basis.
In the latter case, the choice of the representative must be motivated.
If the representative is impeded, the members will appoint a replacement. Each replacement of the representative must be communicated to the AED within 3 working days.
The VAT group is assigned an individual identification number (to be used in its relations with the Administration) along with as many auxiliary identification numbers as there are members.
On the effective date of the declaration of incorporation of a VAT group or entry into an existing VAT group, members already identified for VAT purposes are automatically deemed to be in cessation of activity for the needs of their own declarative obligations.
Submission of the declaration
The declaration of incorporation of a VAT group is to be introduced by the representative using a form which is to be sent to the AED.
The declaration of incorporation of a VAT group is to be submitted by the representative. It includes, among others:
- the complete organisation chart of the group of companies;
- the complete chart of economic flows between the members of the group;
- a detailed list with the persons fulfilling the conditions of membership to the VAT group including, for each person, the nature of their links with the other members;
- a detailed list with the persons withdrawing from the participation in the VAT group including, for each of person, the nature and extent of their economic links with the various effective members of the VAT group;
- the options for the application of the scheme, subscribed by the members;
- the declarations of waiver of participation in the VAT group;
- certificates concerning the existence of close financial links between members as established by a statutory auditor or a chartered accountant. Certificates must be renewed annually and sent to the AED together with the annual VAT return.
The declaration, complete and duly documented, will take effect on the first day of the month following the expiration of a period of 15 days from the date of its receipt by the administration.
The members of the VAT group are jointly responsible for the accuracy of the data provided to the AED.
The VAT group is supposed to cover for the new member, as regards the regularisation of the tax base and the input tax in relation to the operations carried out by the new member before their entry into the VAT group.
Any transaction between members of the VAT group gives rise to the establishment of a specific document, unless the transaction is concluded with a document constituting an invoice. Said document has to include all the invoicing details relating to the precise indication of the nature, the scope and the valuation of the transaction accounted as well as the place and date of completion of the transaction.
In the event that the transaction is invoiced, it must bear an unequivocal reference to the implementation of the VAT group scheme.
Likewise, the invoices relating to transactions made with the VAT group must be drawn up in the name, under the address and under the auxiliary identification number of the member who is the recipient.
The summary statements are to be filed by the VAT group, separately, in the name and under the auxiliary identification number of each individual member.
The frequency of summary statements is based on the related turnover achieved at the level of the VAT group.
The VAT group is required to submit, as an annex to the annual VAT return, the total amount of the transactions carried out by each member for each of the other members of the VAT group.
If the entry or withdrawal of a member of the VAT group takes place during a taxable period, the VAT group is obliged to subscribe, for the same period, a summary statement of the suppliers and service providers identified for VAT in another Member State concerning the supplies made under the auxiliary identification number of the new or outgoing member. The summary statement should not be filed if the new or outgoing member has not been individually identified for VAT purposes during this period.
The members of the VAT group are jointly liable for VAT, interest on arrears, tax fines and fees due as a result of operations that relate to the period during which these persons were members of the group.
Withdrawal of a member / dissolution of the VAT group
Any participation in a VAT group must cover an obligatory minimum period of 2 calendar years.
An outgoing member has to cover all rights and obligations of the VAT group with respect to the regularisation of the tax base and the input tax for operations carried out during their membership in the VAT group and which were declared by said member.
The withdrawal of a member of the VAT group takes effect:
- on the day from which the member no longer fulfils the conditions of membership in the group or,
- in the event of renunciation of membership in the VAT group, from the date of receipt of the declaration of withdrawal.
The VAT group is dissolved by the exit of its penultimate member.
Persons who, once they have left the VAT group, continue their activities, either as a taxable person or as a non-taxable legal person, remain individually identified for VAT if:
- they expressly state it in the declaration of withdrawal; or
- they introduce such a request before their leaving the group takes effect.
Forms / Online services
Déclaration de constitution d’un groupe TVA en application du régime particulier prévu à l’article 60ter de la loi modifiée du 12 février 1979 concernant la taxe sur la valeur ajoutée
Déclaration d'option pour l'application du régime de groupe TVA prévu à l'article 60ter de la loi modifiée du 12 février 1979 concernant la taxe sur la valeur ajoutée
Déclaration de renonciation à l’option pour le régime de groupe TVA, telle que prévue à l’article 60ter paragraphe 10(6) de la loi modifiée du 12 février 1979 concernant la taxe sur la valeur ajoutée