Fiscal unity for corporate tax

In the Netherlands, several legal entities can request a fiscal unity for corporate taxes. This means that taxes are levied from these corporations as if it is a single entity liable for taxes.

The big advantage of the fiscal unity is that mutual loss relief is possible between corporations in a fiscal unity. In principle, transactions within the fiscal unity occur neutrally for corporate income tax purposes. Profits and losses in mutual transactions are not taken into account for tax purposes, because there is a single entity from a fiscal point of view. Therefore, a fiscal unity can also be useful in case of restructuring.

The main condition for applying for a fiscal unity is that a parent company possesses 95% of the judicial and economic property of the nominally paid-up share capital in the subsidiary company.

More than one subsidiary company can be part of a fiscal unity. It is also possible to request a cross-border fiscal unity. Such a cross-border fiscal unity is also possible between sister companies.

A fiscal unity can be requested retroactively up to three months and it can also be broken up following a request. However, in case of breaking up a fiscal unity, it is possible that corporate income tax is owed over earlier transactions. A fiscal unity can also have consequences for the loss relief and for determining the recognised acquisition price.

Would you like to receive advice on requesting a fiscal unity?

accon■avm can counsel your request for a fiscal unity and can provide customised advice about the consequences of the fiscal unity. Contact one of the specialists in international tax advice via international@acconavm.nl or fill out the form below.