Einde inhoudsopgave
Treaty Application for Companies in a Group (FM nr. 178) 2022/5.2.2.3
5.2.2.3 Group relief system
L.C. van Hulten, datum 06-07-2022
- Datum
06-07-2022
- Auteur
L.C. van Hulten
- JCDI
JCDI:ADS659506:1
- Vakgebied(en)
Omzetbelasting / Plaats van levering en dienst
Voetnoten
Voetnoten
S. Princen & M. Gérard, ‘International tax consolidation in the European Union: evidence of heterogeneity’, European Taxation 2008, vol. 48, no. 4, par. 4.2.3.
B.F.A. da Silva, The Impact of Tax Treaties and EU Law on Group Taxation Regimes, Alphen aan den Rijn: Kluwer Law International 2016, par. 6.3.2.
This is the case in the system as applied in the United Kingdom. In that system ‘excess donations, property business losses, management expenses and non-trading losses’ may be transferred within a group (Z.M. Reijn, N. van de Voorde & F.M. van der Zeijden, ‘Tax Grouping in an EU Context: All Roads Lead to Brussels’, European Taxation 2018, vol. 58, no. 7, par. 2.2.2).
Z.M. Reijn, N. van de Voorde & F.M. van der Zeijden, ‘Tax Grouping in an EU Context: All Roads Lead to Brussels’, European Taxation 2018, vol. 58, no. 7, par. 2.2.2.
B.F.A. da Silva, The Impact of Tax Treaties and EU Law on Group Taxation Regimes, Alphen aan den Rijn: Kluwer Law International 2016, par. 6.3.2.
Z.M. Reijn, N. van de Voorde & F.M. van der Zeijden, ‘Tax Grouping in an EU Context: All Roads Lead to Brussels’, European Taxation 2018, vol. 58, no. 7, par. 2.2.2.
B.F.A. da Silva, The Impact of Tax Treaties and EU Law on Group Taxation Regimes, Alphen aan den Rijn: Kluwer Law International 2016, par. 6.3.2.
A group relief system in short allows the transfer of losses from one group member to another to take into account the economic unity of the group.1 To calculate the loss that can be transferred, each group member’s income or loss is first calculated separately. The system has a similar approach as the group contribution system. However, under a group contribution system profits are transferred, while a group relief system allows losses to be transferred. The losses are transferred to a profit-making group member.2 Additionally, there may be the possibility to transfer other items of income.3 Generally, a group relief system can be applied solely to domestic group companies.4
A group relief system leads to a somewhat more legal form neutral situation than a true separate entity approach, as groups of companies are treated more like single entities. The system, similar to a group contribution system, respects legal entities within a group. Each group entity is still seen as a separate taxpayer: no single tax group basis is created.5 Additionally, intercompany transactions are still visible for tax purposes.6 A group relief system offers a relatively simple method to utilize operating losses.7