Fiscal unity for the Dutch VAT
In some cases it can be possible for business groups to be considered as one taxpayer for the Dutch VAT. Several enterprises can therefore be seen as one enterprise for the VAT. Usually the unity is created by a parent enterprise and one or more subsidiaries. Creating such a fiscal unity has a number of interesting advantages. However, there are also some disadvantages that need to be taken into consideration. This article will tell you more about how the fiscal unity can be appealing for the VAT and under what conditions you can create a unity for the VAT.
Advantages of a fiscal unity for the VAT
When you designate several companies as one enterprise for the VAT, this will have administrative advantages. For example,, you will only have to declare your periodical VAT-declaration once for all companies that fall under the unity. Although the enterprises that fall under the unity will continue to do business under their own VAT-number, they will receive one new VAT-number for the Tax Authorities. With this the declaration turnover tax is done for all the enterprises in the unity. Another advantage is that when the enterprises bill amongst themselves, these transactions are exempt from VAT. This will simplify the administration and preventing the payment of VAT can be beneficial for the liquidity of the enterprises in the unity.
Disadvantages of the fiscal unity for the Dutch VAT
Although it can be appealing to join enterprises in a fiscal unity for the VAT, it is important to realise that with a fiscal unity every enterprise is liable for the VAT-debts. Therefore, it is vital to ensure that all enterprises under the fiscal unity meet the requirements for the creation of the unity and that all companies continue to meet these requirements. When, after changes, one of the enterprises no longer meets the requirements for the creation of the fiscal unity, then this must be reported to the Tax Authorities.
Requirements for the creation of the fiscal unity for the VAT
The Tax Authorities demand that the companies in the fiscal unity for the VAT are established in The Netherlands and are entrepreneurs for the purposes of the VAT. With this the companies will have to form a unity on a financial, organisational and economic level. Sometimes it can be difficult to determine if all the enterprises in question meet these requirements. In this case you can submit a written request with the tax office to determine whether there is sufficient grounds to become a fiscal unity. Lastly, not every legal entity can be considered for the creation of a fiscal unity in the VAT. Creating a fiscal unity cannot involve enterprises that only exist out of natural persons. At Least one private company, foundation or association will need to be included in the creation of the fiscal unity.
Creating a fiscal unity for the Dutch VAT
Is it beneficial for a group of companies to create a fiscal unity for the VAT and do they meet the requirements? Then you can submit your application for the fiscal unity with the Tax Authorities. You request the creation of the unity with your tax office. You can also ask questions about the creation, alteration or termination of the fiscal unity.
Further information
Would you like to read more about the creation, alteration or termination of the fiscal unity for the Dutch VAT? Read more on the Tax Authorities website (in Dutch). Do you have questions about the fiscal unity for a regional tax office? With this tool (in Dutch) you can find the contact information for your location. Under certain conditions it is also possible to create a fiscal unity for the partnership tax. You can read more about that here.