Stückmann Podcast Episode 37: When does a VAT group come into existence – and what are the implications for businesses?
The VAT group is one of those topics that is often underestimated in practice. Unlike an income tax group, it does not arise from a deliberate decision by the companies, but by operation of law. It is precisely for this reason that companies frequently find themselves unintentionally becoming part of a VAT group – often with significant tax consequences. In the latest episode of ‘Steuern to go’, Juliette Gill and Kathrin Hansen discuss what companies should bear in mind, which requirements must be met, and what changes the legislator is planning.
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That’s what this podcast episode is about
A VAT group plays an important role not only in large corporate groups. Medium-sized groups of companies or traditional parent-subsidiary structures may also be affected. This podcast episode therefore focuses on the question of under what conditions a VAT group actually exists and why, in practice, it often arises unnoticed or ceases to exist just as unnoticed. Using clear examples, the speakers explain the legal requirements and highlight the implications these have for day-to-day business operations.
Particular attention is paid to the three criteria for integration – financial, organisational and economic integration. The experts explain in clear terms how these criteria are to be assessed in practice and why it is always necessary to take a holistic view of the actual circumstances. Even minor changes within the company’s structure or management can lead to a fundamental change in the VAT assessment.
What are the tax implications?
Where a VAT group exists, the parent company and the group companies are treated as a single taxable person for VAT purposes. This legal consequence has a direct impact on the tax treatment within the group of companies. Consequently, transactions between the companies are, in principle, no longer treated as taxable supplies, whilst VAT returns and annual returns are submitted exclusively by the parent company. This podcast episode explains the practical advantages that may arise from this, as well as the risks involved if a VAT group exists unnoticed or ceases to exist.
Why this topic is particularly relevant right now
The issue has gained further relevance due to the draft bill for the Annual Tax Act 2026. The legislature is planning extensive amendments that could significantly alter the current legal situation. In future, a tax group is no longer to be formed solely on the basis of the actual circumstances, but will also require a declaration to be made to the tax authorities. Furthermore, partnerships are to be expressly included in the Act as member companies of a tax group. The aim of these new regulations is to increase legal certainty for businesses and to significantly reduce the risk of an unintended tax group being formed.
At the same time, the podcast episode makes it clear that even the planned changes will not fully exempt companies from their obligation to carry out checks. This is because, even in future, the statutory criteria for inclusion must still be met. If these conditions are no longer met, a declared group of companies may cease to exist – with corresponding tax consequences. It is therefore essential to carry out regular checks on the actual circumstances.
Who will find this podcast episode particularly interesting?
This episode is aimed in particular at business owners, managing directors and those responsible for tax, finance and accounting. Tax advisers will also gain a concise overview of the current legal situation and the planned legislative changes. Anyone who regularly alters corporate structures or manages several companies within a group of companies will find valuable guidance on which issues require particular attention with regard to VAT.
Recommendations for businesses
This podcast episode impressively demonstrates how important it is to regularly review corporate structures and operational processes. Changes to shareholdings, management structures or service relationships can result in a VAT group being formed or dissolved without this being immediately recognised. Against the backdrop of the planned legislative changes, it is therefore advisable to analyse existing corporate structures now and to assess at an early stage what impact the future regulations might have on one’s own group of companies.
Have a listen now
In this episode of ‘Steuern to go’, you will gain a concise and practical overview of the requirements for a VAT group, its tax implications, and the changes planned under the Annual Tax Act 2026. Our experts provide a clear explanation of the current legal situation and offer valuable advice on what companies should be mindful of today in order to identify tax risks at an early stage and ensure legal certainty.
