In a recently published binding consultation, the Spanish General Directorate of Taxes (GDT) has clarified that, under the Corporate tax consolidation scheme, transactions that do not generate any benefit at a group level shall not be eliminated from the stand –alone taxable result of the companies forming part of the group.
The reason for this conclusion is that, otherwise, the elimination would generate a patrimonial transfer between the entities intervening in the relevant transaction.
✔ The tax consolidation scheme is a special Corporation tax scheme, for which taxpayers have to elect, that implies taxation at a group level and not on a stand – alone basis of the entities forming part of it.
✔ In order to calculate the taxable result of the group, it is necessary to eliminate transactions between group members, following the criteria set forth by accounting regulations, providing they affect benefits included in the stand –alone results of the companies.
✔ In the event of real estate rentals between the group entities, the GDT has concluded that, in so far as the amount of taxable income and of the tax deductible expense are the same, they shall not be eliminated when determining the stand – alone taxable result of each entity. This is an internal transaction that does not generate any taxable income at a group level.
✔ Instead, the results deriving from intra group transactions that generate a result at a group level do have to be eliminated. They will be incorporated in the fiscal year they are realized before third parties, not belonging to the group. This is the case, for example, of the sale of goods that has not been realized before third parties outside the group.
Source: Binding Consultation CV2751-16, of June 17.
Publicado el 07-2016 por PBS