The situation
The group’s Dutch and Austrian entities and their internal charges
An insurance-broking group based in Linz has four Austrian companies and, since an acquisition last year, three Dutch companies that charge each other for IT, office services and management. The broking income is VAT-exempt, so VAT on those internal charges is a real cost. Group tax wants a memo on whether VAT groups in either country remove it.
The idea is the same in both countries and the mechanics are not. In the Netherlands a fiscal unity is formed by a decision of the tax authority. In Austria an Organschaft follows from the facts. The hours go on testing each entity against the conditions and on what the group gives up in return.
What the research has to settle
The rules behind the answer
- A VAT group is one taxable person
- The VAT Directive lets a member state treat closely linked persons established in its territory as a single taxable person. Supplies between members of the group then fall outside the scope of VAT.
- Groups stop at the border
- A VAT group covers only establishments in the member state that formed it, so the Dutch and Austrian companies cannot share one. In Skandia America (C-7/13) the Court of Justice held that services from a foreign head office to its branch in a VAT group are taxable supplies.
- Netherlands: a fiscal unity and joint liability
- A Dutch fiscal unity for VAT requires financial, economic and organisational ties between the entities and takes effect by decision of the tax authority. Each member is jointly and severally liable for the group’s VAT.
- Austria: an Organschaft follows from the facts
- In Austria, a subsidiary financially, economically and organisationally integrated into a controlling company forms a VAT group with it by law, without an application. How far that model fits the Directive is a point the research checks against the Court of Justice’s case law.
How it runs in azta
From the question to the document
The question, as you would type it
Austrian broking group: parent and three subsidiaries in Austria, three Dutch BVs owned by the Austrian parent, mostly VAT-exempt income. Can the Dutch BVs form a VAT fiscal unity, is there already an Organschaft in Austria, and can the two be combined?
You start with
The group’s Dutch and Austrian entities and their internal charges
- 01
Describe the entities and the flows
Give each company, its owners, management and the internal charges. azta researches the VAT Directive, the Dutch and Austrian VAT acts and the Court of Justice.
Cited research· Free - 02
Read the conditions in the original
Open the Dutch and Austrian provisions on grouping in their original language, with in-force status.
Atlas statute reader - 03
Draft the memo
Ask for a memo per country: who qualifies, how the group is formed, what it removes and what it costs in liability and administration. Edit it in Canvas.
Canvas · Ask azta· Pro You send
A memo on VAT grouping in each country, with conditions and consequences
What you get
A memo on VAT grouping in each country, with conditions and consequences
VAT memo · draft
VAT grouping for the Austrian and Dutch companies
Austria. The three subsidiaries are wholly owned, managed by the parent’s board and run as part of one business. On these facts an Organschaft is likely to exist already. If so, the internal charges between them are outside the scope of VAT and should not carry VAT.
Netherlands. The three BVs appear to meet the financial, economic and organisational conditions. A fiscal unity would take effect only by decision of the tax authority. All three BVs would then be jointly liable for the group’s VAT.
Between the two countries. No single VAT group can cover both. Charges from the Austrian parent to the Dutch BVs remain cross-border supplies, subject to the reverse charge in the Netherlands.
Outcomes on your numbers
What azta is worth on this task
Pro pays for itself after
13 minutes a month
At €130 an hour, that is all the time Pro (€27 a month) has to take off your desk to cover its price.
Example figures. Replace them with your own.
- Hours back a year
- 22
- Capacity at your rate
- €2,808
- More VAT grouping memos a quarter
- 0.8
- Return on Pro
- 8.7×
- Research
- Drafting
- Your review
A scenario you set, not a promise. The hours that come back go to another client, or deeper into this one.
Want these numbers on your team’s real workload?
Book a demoSources azta searches here
- EUR-Lex · Curia
- wetten.overheid.nl
- Belastingdienst
- RIS
What stays with you
- Confirming management and ownership facts for each company.
- Deciding whether the liability is worth the VAT saved.
- Any application to the Dutch tax authority.
Frequently asked questions
- Does azta apply for the fiscal unity?
- No. It researches the conditions and drafts the memo. The application is yours or your advisor’s.
- Does it find Court of Justice decisions on VAT groups?
- Yes. The Court of Justice’s case law is part of the sources azta searches, with each judgment linked to its full text.
- Can it work from our intercompany agreements?
- Yes. Upload them and azta reads them alongside the law, referring back to the clause it relied on.
