Corporate bodies that are under “common
control” and are established or have a fixed establishment in the United Kingdom may apply to register as a VAT group.
A VAT group is treated as a single taxable person. The group members share a single VAT number and submit a single VAT return.
No VAT is charged on supplies made between group members.
Group members are jointly and severally liable for all VAT liabilities.
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Subject to certain requirements, two or more entities that are closely related may form a GST group.
The effect of GST grouping is to treat the group members as a single entity for certain purposes. In general, all GST liabilities and input tax credit entitlements for group members are attributed to a representative member of the group, and the group submits a single GST return (incorporated as part of the Business Activity Statement;
The representative member of the group must be an Australian resident. However, nonresidents may be included in a GST group as members.
Transactions between group members
are not considered taxable for GST purposes and consequently are effectively ignored.
When the legal entities are considered as “Closely related” is defined under the act.
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A group must appoint a representative member. Group members
making supplies outside the group must issue tax invoices.
The representative group member must
account for GST with respect to all group members’ taxable
activities and file returns. Group members must adopt the same tax periods and accounting basis for GST purposes.
Group members are also jointly and severally liable for all
GST liabilities.
Transactions between group members are not generally liable to
GST. This measure applies on the condition that the supply is made to a group member that would have been entitled to input tax recovery if the supplier had not been a member of the group.
Group registration is allowed for corporations
or other taxable persons that are “under common control.”
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Although, GST/HST group registration is not permitted in Canada.
Legal entities that are “closely connected” must register for GST/
HST individually.
However, “closely related” corporations and partnerships may
elect to deem supplies made between members of the group as being made for no consideration if the members are engaged exclusively in making taxable and zero-rated supplies.
This provision effectively makes sales between group members subject to
the zero rate.
When the legal entities are considered as “Closely Connected” is defined under the act.
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