An entry into force for the new regime is planned for 31 July, 2018
VAT could be simplified for some companies in Luxembourg as the country prepares to implement a VAT group scheme for 31 July 2018.
The proposal, which was presented to members of the Luxembourg parliament’s finance and budget committee on Friday, comes in response to the European Court of Justice cases on cost-sharing arrangements within independent groups of persons, prohibiting its use by the financial sector.
The Luxembourg VAT group scheme would provide an optional regime for companies in all sectors to be collectively subject to VAT, the government said in a press release. “It would be applicable for both steel groups but also for companies in the financial sector or insurance,” the statement said.
Reporting on the proposal on Friday, PwC Luxembourg said the rationale behind the grouping was to give member states the tools to combat abuse and fraud while simplifying the administrative and compliance burden for tax authorities and businesses. It would mean one consolidated VAT return for each VAT group. It said to be eligible, members must be established in Luxembourg or have a fixed establishment there, in addition to which the members must be able to prove a financial, economic and organisational link.