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Corporate Tax Services Advice about the fiscal unity regime

Advice about the fiscal unity regime

The fiscal unity regime constitutes a true consolidation for corporate income tax purposes. Consequently, corporate income tax is levied on all companies on their consolidated taxable profit as if they were a single taxpayer.

The fiscal unity has one fiscal balance sheet and one profit and loss account. Each member of the fiscal unity is in principle jointly and individually liable for the corporate income tax liability of the entire fiscal unity. However, corporate income tax assessments for this fiscal unity are only imposed on the parent company.

Transactions within the fiscal unity are disregarded for corporate income tax purposes. This requires that remunerations with respect to obligations between the fiscal unity companies, such as for instance interest, are eliminated from the fiscal result. Assets can be transferred exempt from corporate income tax within the fiscal unity, although they will become ‘tainted’ so that a tax liability may arise upon deconsolidation.

One of the main advantages of the fiscal unity is horizontal loss compensation (i.e. within one financial year) between the companies included in the fiscal unity. Income generated by profitable companies will be offset by incurred losses from other companies within the fiscal unity, thus reducing the overall taxable profit.

Transactions within the fiscal unity are disregarded for corporate income tax purposes.

Income generated by profitable companies will be offset by incurred losses from other companies within the fiscal unity, reducing the overall taxable profit.

Would you like to find out whether the Dutch fiscal unity regime can be of benefit for your international organization, please feel free to contact us.

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