Einde inhoudsopgave
Treaty Application for Companies in a Group (FM nr. 178) 2022/5.2.3.2
5.2.3.2 Partial consolidation system
L.C. van Hulten, datum 06-07-2022
- Datum
06-07-2022
- Auteur
L.C. van Hulten
- JCDI
JCDI:ADS659463:1
- Vakgebied(en)
Omzetbelasting / Plaats van levering en dienst
Voetnoten
Voetnoten
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. 2.2.3.
A. Ting, ‘The Unthinkable Policy Option? Key Design Issues Under a System Full of Consolidation’, Canadian Tax Journal 2011, vol. 59, no. 3, p. 432.
A partial consolidation system is also described in literature as a system in which either the possibility to offset intra-group profits and losses or the possibility to defer intra-group gains from transfers of assets exists (K. Jain, ‘The OECD Model (2017) and Hybrid Entities: Some Opaque Issues and Their Transparent Solutions’, Bulletin for International Taxation 2019, vol. 73, no. 3, par. 2.3.1.1).
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. 6.3.3.1.1.
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. 2.2.3.
E.g., Denmark (R. Offermanns, ‘Een vergelijking van de fiscale eenheidsregimes binnen Europa en hun verenigbaarheid met het EU-recht’, Tijdschrift voor Fiscaal Ondernemingsrecht 2016/146.2, par. 4.2.2).
A partial consolidation system creates a common tax base to determine the corporate income tax due.1 In this regard the individual tax results of the group members are aggregated (‘pooling’). Under a pooling system, the results of the various group members are first calculated per entity. The parent company and the subsidiaries are treated as separate entities for taxation purposes.2 Subsequently, the results are aggregated to determine the consolidated tax basis.
The application of a partial consolidation regime gives the possibility to offset profits and losses between group members. Therefore, it leads to a tax system with more legal form neutrality. However, the existence of group companies is not ignored from a tax perspective. Intra-group transactions remain visible within a partial consolidation system.3 Under such a system intra-group asset transfers give rise to immediate taxation.4 In practice, the partial consolidation system can often only be applied to domestic companies.5 There are, however, also countries that apply a cross-border group consolidation system.6