Group VAT Liquidation: Use of Excess Deductible VAT adn Credit Certification
Within the liquidation regime of Group VAT, as outlined in art. 73, paragraph 3 of Presidential Decree 633/72, the parent company is responsible for determining the overall tax due by the group. This is achieved through an algebraic sum of the debts and credits resulting from the liquidations of all participants.
the group leader also bears the responsibility for paying any resulting debt excess and deciding how to utilize any credit excess arising from periodic or consolidated annual liquidations.
Specifically, if an excess of deductible VAT emerges from the annual declaration presented by the parent company, this credit can only be used by the parent company itself in the following year. According to art. 5 of the Ministerial Decree of 13 December 1979, this credit can be:
* Requested as a refund;
* Deducted in deduction;
* Utilized in “horizontal” compensation ex art. 17 of dlgs. 241/97.
Furthermore, credit surpluses transferred to the group and actually compensated within the procedure are subject to the credit certification obligations detailed in art. 38-bis paragraphs 3 to 6 of Presidential Decree 633/72 (art.6, paragraph 3 of the Ministerial Decree of 13 December 1979).
According to the financial administration (RM n. 626305/89), this also applies to credits remaining after compensation, even if compensated in the year following their origination.In such cases, the guarantees relating to the excess of group credit must be provided separately from any guarantees the parent company is required to provide for compensated credit surpluses resulting from its own declaration for the same year.
Summary of Ministerial Circular No. 13/1990 & Subsequent Clarifications Regarding Group VAT Credit & Guarantees
This document details the obligations regarding VAT credit arising from group VAT procedures, specifically when a company (the “former parent”) exits the group.Here’s a breakdown of the key points, based on the provided text and referencing related circulars and legislation:
1. ministerial Circular 13/1990 – Core Principle:
* This circular established that guarantee obligations for VAT credit extend to the credit utilized by the former parent company following the interruption of the group VAT procedure. Essentially, even after leaving the group, the former parent remains liable for certain VAT credits.
2. Clarifications & Subsequent Guidance:
* Unused Credit: if a group liquidation results in a surplus of VAT credit, and the group procedure isn’t renewed (e.g.,the parent company ceases to exist during the year),any excess credit can only be used by the remaining group member or the former parent company. They can then request reimbursement or deduct it from their own VAT liabilities in the following year.
* Warranty/Guarantee: the corresponding warranty for this credit must be declared in the annual declaration for the compensated party. (CM n. 144/98, point 1.8 reinforces this).
* VAT Declaration (Model 2025 Instructions): Instructions for the annual VAT declaration (specifically §§ 3.4.4 and 4.2.1 of the instructions for Model 2025) require reporting any unused group credit (deducted by the ex-parent or another company) on line VA12 of the declaration. The guarantees outlined in art. 6, paragraph 3 of the ministerial decree of December 13, 1979, must be provided.
3. practical Exmaple (Alfa Company):
* If a company (alfa) participated in a group VAT procedure until 2024 and then withdrew in 2025, and a credit surplus emerged from the 2024 consolidated liquidation, Alfa must fulfill credit certification obligations (Art. 38-bis, paragraphs 3-6 of Presidential Decree 633/72) if it uses that surplus to offset its own VAT liabilities in 2025.
4. Guarantee Requirements (Art.38-bis, Presidential Decree 633/72):
* For amounts exceeding €30,000, a compliance view (or subscription by a control body, along with certificates of property solidity and contribution regularity) is required.
* However, if the company falls under the risk hypotheses outlined in paragraph 4 of Art. 38-bis, a guarantee is required rather.
In essence, the document clarifies that exiting a group VAT procedure doesn’t absolve the former parent company of responsibility for previously generated VAT credits, and specific guarantee requirements apply depending on the amount of credit utilized.