The deadline for opting the group taxation for corporate income tax purposes is approaching
Enterprises with fiscal years following the calendar years may submit their application to the national tax authority between the 1st and the 20th of November if they wish to benefit from the group taxation for corporate income tax purposes from the next fiscal year.
This 20-day period is opened for affiliated companies contemplating to apply for group taxation as well as for enterprises wishing to join to an existing group. This is however a forfeit deadline with no extension available. The group taxation will be permitted to the applicant, meeting the criteria, from the following fiscal year.
The group taxation offers considerable corporate income tax benefits along with administrative simplifications. The group, on one hand, files a single corporate income tax return. On the other hand, transactions between the corporate income tax group members are out of scope of the transfer pricing (TP) rules and not covered by the TP documentation liability either. In addition, the carry-forward loss can be utilised under more favourable conditions. Furthermore, the corporate income tax group may provide the opportunity to account for some tax allowances that a distinct taxpayer may not be able to utilise in the given fiscal year.
Forming a corporate income tax group or joining to an existing one is however bound to strict conditions and each group member is jointly and severally liable with the other members for any corporate income tax responsibilities arose under the group taxation regime even if they joined to the group at a later stage.
Should you have any questions on the above topic, please do not hesitate to contact our experts.
