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Special system of the group of entities

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How the REGE works

Within the Special Regime for Groups of Entities, there are two options for taxation:

  1. Normal modality:

    • Every company that forms part of the group must apply VAT individually and independently for all their transactions, filing individual self assessments with a monthly settlement period. These self-assessments will determine the amount to pay or be refunded, which will be integrated into the aggregate self-assessment of the group.
    • If the result of the group's aggregated self-assessment is to make a payment, this payment must be made by the parent company. If the result is a refund, the parent company can request this, provided that no more than four years have passed since the individual self-assessments of the subsidiaries requiring the refund were filed.

  2. Advanced type:

    • The option to use the advanced modality corresponds with all companies that form part of the same group, and is adopted through an agreement of the Boards of Administration or equivalent bodies thereof. The parent company will inform the Tax Agency of this option through form 039, which will then have a minimum validity of one calendar year, and will renew automatically unless expressly waived.
    • The gross tax base of supplies of goods and provisions of services carried out in the tax's application territory (Peninsular and Balearic Islands) between companies of the same group that apply the REGE (special regime for groups of companies), will be formed of the cost of the goods and services, used directly or indirectly, in whole or in part, for which the tax has been borne or paid.

      When the goods are considered investment goods, the taxation must be completed in full within the regularisation period for charges corresponding with said goods.

    • Each of the companies in the group will act in accordance with the general regulations of the tax, in all their transactions with companies that do not form part of the same group. 
    • Transactions between companies in the same group that apply the REGE will constitute a differentiated sector of activity, whereby, as of 1 January 2015, they must apply the special pro rata rule. Goods and services used directly or indirectly, in whole or in part, in the execution of intra-group transactions are considered to be attached to the differentiated sector thereof, when the tax has been borne or effectively paid for such transactions, and whereby all input tax charges are fully deductible.