STORIES

12 February, 2014

Tax Consolidation as an Effective Optimization Tool in Spanish Corporation Tax

Share This:

The use of tax losses is a stand-alone right that corresponds to the entity that has generated them.

Despite this general rule and given the changing scenario in the possibility to achieve a double dip through the provision for the depreciation of portfolio, tax consolidation scheme appears as an effective optimization tool to reduce the overall Spanish group tax burden.

Up to Jan. 01, 2013, the portfolio depreciation provision allowed the tax recognition of the loss in the parent company, subject to certain requirements. This possibility as been eliminated from the tax regulations, effectively as of the mentioned date, since portfolio depreciation is no longer tax deductible.

In this new scenario, companies must look for the most optimal way to take profit of the use of a tax loss of a company within a group by the rest of the group entities. One of the routes to achieve such a purpose is the use of a tax consolidation scheme.

Under such scheme, stand-alone tax losses generated in a given year, while tax consolidation is in force, can be offset against the profits of the rest of the tax consolidation group. It is required that the parent Group company holds, directly or indirectly, a minimum 75% in the rest of the non-quoted companies forming the Group, that is regarded as a sole taxpayer.

Several formalities and requirements must be complied with, hence, it is recommendable to seek for appropriate and reliable tax advice from an expert.

Share This:

CONTACT

MADRID
Orense 34, planta 8ª 28020.
T+34 91 192 21 22

MAP

BARCELONA
General Mitre 28-30 08017.
T+34 93 363 65 10

MAP

Based in Barcelona and Madrid. Englobally is our Latin American business partner established in Santiago de Chile.

We are also part of Englobally Group, an international association of independent accounting and advisory firms that provide a one-stop shop managed solution for accounting, payroll and HR needs, with member firms in over 25 countries and associates working in many others. Many fast growing technology and lifescience businesses find their international services invaluable. Companies in many other sectors are attracted by the close and supportive way Englobally Group works.

Name

E-mail

Please leave this field empty.

Message

Please type the code below

captcha