Changes to the VAT Group: Section 2c of the German Value-Added Tax Act (UStG) According to the Draft Bill for the 2026 Annual Tax Act (JStG 2026)

The draft bill for the Annual Tax Act of 2026 is intended to fundamentally reform the VAT group regime. The proposed Section 2c of the Value-Added Tax Act (UStG) replaces the previous system – under which a tax group was automatically established by law upon fulfillment of the statutory requirements – with a declaration-based procedure, expands the range of companies that may be part of a tax group, and introduces, for the first time, a separate correction and liability regime. This article highlights the key changes, contextualizes them from a practical perspective, and identifies areas where the reform approach still leaves questions unanswered despite the increased legal certainty.