Tax group

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An affiliation is a group of legally independent companies to a tax unit. Here, a legally independent company (the controlling company ) to another legally independent company (the controlling company ) so integrated that the fiscal operations of the Subsidiary Company are generally attributed to the controlling company as their own. As a result, both companies appear as a single taxpayer without losing their legal independence.

The tax treatment of the tax group is also known as group taxation . Group taxation of this kind is also permissible across countries in some countries, so that the tax burden due to the losses of foreign subsidiaries can be reduced.

Tax group in Germany

Tax unions are permissible for corporation tax and trade tax and are given for sales tax if the legal requirements are met. The requirements for the corporate tax and trade tax unity on the one hand and the sales tax unity are not the same.

VAT group

A tax group for the purposes of sales tax ( § 2 Paragraph 2 No. 2 UStG) means that there is only one entrepreneur within the meaning of the UStG. For this purpose, the controlling company can be any entrepreneur within the meaning of § 2 UStG. According to Section 2 (2) No. 2 UStG, only legal persons can be affiliated companies. According to the case law of the Federal Fiscal Court, partnerships in the legal form of a GmbH & Co. KG also apply as legal persons for the purposes of this provision of the VAT Act . The interpretation of the term in sales tax law thus differs from the interpretation in other areas of law. The tax group only affects those parts of the company located in Germany. Another prerequisite is the financial, economic and organizational integration of the controlled company into the company of the controlling company.

  • Financial integration exists if the controlling company directly or indirectly holds more than 50% of the voting rights of the controlled company. An exception applies to partnerships. According to the jurisprudence of the V Senate, only the controlling company or persons who are financially integrated into the company of the controlling company may participate in the partnership in the case of a GmbH & Co. KG. The XI. The Senate, on the other hand, sees a GmbH & Co. KG as an affiliated company without requiring a 100 percent participation of the controlling company.
  • Economic integration requires that the controlling company and the controlled company are sufficiently closely interwoven economically. This can be the case, for example, if a holding company provides an operating company with an essential asset or the controlling company is sold through the controlled company. An exchange of services free of charge or the provision of economic services which are only of minor importance (e.g. insignificant office / cleaning work) are not sufficient here.
  • Organizational integration has so far been based on the fact that the controlling company is able to prevent a decision deviating from its will at any time at the management level of the controlled company. In this regard, the BFH decided that it was necessary to be able to control a controlled company in the sense of a superior and subordinate relationship. Accordingly, the controlling company must be able to actually enforce its own will at the management level of the controlled company at any time.

The legal consequence of the tax group is that service relationships between the controlling company and the controlled company ( tax group ) are non-taxable internal sales and therefore no sales tax is owed. External sales , d. H. Services to service recipients outside the group are subject to sales taxation according to general rules.

The VAT group begins as soon as the offense has been met. Contracts between the companies of the group are not a requirement. It is irrelevant whether the companies concerned knew or should have known about the existence of the tax group. It does not depend on an application or a declaration of assessment from the tax authorities. Section 11 of the VAT Directive is decisive for the national regulation of the VAT group . The German legislator may only deviate from its requirements if this is necessary in order to prevent tax evasion or abusive arrangements .

Corporation tax and trade tax unity

A tax group for the purposes of corporation tax ( § 14 KStG ) and trade tax ( § 2 para. 2 sentence 2 GewStG so-called permanent establishment fiction ) causes basically an allocation of all profits and losses of the Controlled Company ( subsidiary ) to those of the Controlling Company ( parent company ). The following explanations and requirements of the tax group are regulated in § § 14 to § 17 KStG. The trade tax only requires an existing tax group for corporate income tax purposes.

Parent company

The parent company can be a natural person with unlimited tax liability , a non-tax-exempt corporation , association or partnership . Furthermore, a domestic branch of a foreign commercial company registered in the commercial register can also be a controlling company. In contrast to the controlled company, the controlling company must be commercially active, ie the requirements for a commercial operation must be met. This is always the case with corporations ( Section 8 (2) KStG). Partnerships (in which natural persons can be involved) can only be parent companies if they are originally commercially i. S. d. Section 15 (1) sentence 1 no. 1 EStG and hold the shares in the corporation themselves, Article 14 (1) sentence 1 no. 2 sentence 2 and 3 KStG.

Affiliated company

Suitable subsidiary companies can only be corporations - SE (European stock corporation), AG , GmbH and KGaA ; other corporations are not legally competent. A GmbH & atypical silent partnership can neither be a controlled company nor a controlling company. A company that merely manages assets is also capable of organizing. In addition, the domicile and management of the subsidiary must be in Germany (double domestic reference). After the European Commission and the ECJ criticized this double domestic connection as inadmissible under European law, the BMF letter of March 28, 2011, in anticipation of a change in the law, stipulated that a corporation established in another EU / EEA country with management in Germany also as a subsidiary can act. The amendment to the law was implemented by the law amending and simplifying corporate taxation and tax travel expense law on February 20, 2013 ( Federal Law Gazette I p. 285 ). This codified the legal situation as created in the BMF letter of March 28, 2011 at the administrative level. In the future, European corporations with a statutory seat in another EU / EEA country and a seat of management in Germany can therefore be affiliated companies. A cross-border tax group will still not be possible due to the requirement of the profit and loss transfer agreement, as this corporate agreement is largely unknown in Europe.

requirements

Financial integration and the profit and loss transfer agreement (within the meaning of Section 291 (1 ) AktG ) concluded for at least five years and carried out between the parent company and the subsidiary in accordance with Section 14 KStG are provided as the prerequisites for income tax recognition .

Financial inclusion

Financial integration exists if the controlling company held a majority stake in the controlled company without interruption from the beginning of the financial year - in such a way that the controlling company has the majority of the voting rights from the shares in the controlled company. As a rule, the number of shares and the number of voting rights coincide, although there are deviations if there are shares with multiple voting rights and / or there are non-voting shares. Indirect holdings can be combined with other indirect and direct holdings; It only has to be ensured that the controlling company can actually steer the controlled company with a view to the voting rights.

Profit and loss transfer agreement

The profit and loss transfer agreement must be concluded for at least five years and must actually be carried out during this period. The term profit and loss transfer agreement is not used in Section 291 (1) AktG, where the legal term “profit and loss transfer agreement” is used. In terms of content, this term under stock corporation law is only partially applicable, after all, within the framework of the tax group, not only is the entire profit of the controlled company to be transferred to the controlling company, but the controlling company is also obliged in return to assume the entire losses of the controlled company. The non-legal term “profit and loss transfer agreement” therefore corresponds more to the nature of the bond under stock corporation law, which includes both profit and loss transfer obligations. According to Section 14 (1) No. 4 KStG, it is harmless if revenue reserves are created that are economically justified based on a reasonable commercial assessment .

Cross-border loss offsetting

A cross-border tax group is not possible due to the mandatory unrestricted tax liability of the controlling company and the controlled company. In principle , losses incurred by a group company in (double taxation) countries in spite of the global income principle can not be offset against domestic profits, since the foreign profits i. d. As a rule, they are tax-exempt in Germany according to the relevant double taxation agreement .

However, according to the Marks & Spencer decision of the European Court of Justice, under certain conditions it is required under European law to allow cross-border loss offsetting in the event of final losses between the mother and a subsidiary in other EU / EEA countries.

Multi-parent organization

In the case of corporation tax and trade tax unity, so-called multiple parent unions were also possible up to the assessment period 2002 . A multi-parent unity existed when several commercial companies capable of organizing a company maintained a commercial company and jointly formed an unity. With the law on the further development of corporate tax law of December 20, 2001 ( Federal Law Gazette I p. 3922 ), the multi-parent unity discussed by the tax authorities and case law was initially anchored in law, but from the 2003 assessment period, the multi-parent unity is then subject to the Tax Reduction Act of May 16, 2003 ( BGBl. I p. 660 ) has been completely abolished.

Group taxation in Austria

With the Tax Reform Act 2005, Austria established group taxation that has a cross-border effect. Losses of a foreign subsidiary can be offset against the Austrian result in the amount of the participation quota. If the foreign company generates profits again in a later year, these must be added back to the Austrian result (recapture). This regulation can also serve as an incentive for corporations to set up their headquarters in a state with group taxation.

requirements

Financially related entities can form a corporate group consisting of a group parent and group members. A company is financially connected if it has a stake greater than 50%. The participation can exist directly or indirectly (also through a partnership). In addition, the group leader must also have the majority of the voting rights in the group member ( Section 9 of the Austrian Corporate Tax Act). The group leader can also be a joint venture. Two or more partners can form a group of multiple mothers. One participant must hold at least 40%, each other at least 15%. Furthermore, foreign corporations can also be group owners, provided that the holdings in the group members can be assigned to a branch of the foreign corporation registered in an Austrian commercial register. Group members can be Austrian corporations, trade and business cooperatives, mutual insurance associations within the meaning of the Insurance Supervision Act and credit institutions within the meaning of the Banking Act. Furthermore, foreign corporations that are financially linked to Austrian companies can be group members.

The group member's financial ties must exist throughout the entire financial year. The group of companies must exist for at least three years. If a member leaves before the end of three years, the tax conditions applicable without a group apply. If a foreign group member leaves the group, then, irrespective of the duration of membership in the group, subsequent taxation of the losses attributable to the foreign group member is always made at the level of the group parent.

effect

In principle, 100% of the tax result is allocated to the directly involved group member or group parent. In the case of joint ventures, the result is proportionally divided among the members of the joint venture. If the group has only one group leader, 100% of the result of the group member is assigned to this group. In the case of domestic group members, the profits and losses are allocated. In the case of foreign group members, only the losses are assigned to the domestic group parent and this only in the amount of the actual participation rate. Tax allocations that are paid between group parent and group members are tax neutral. Pre-group losses (loss carryforwards before group formation) can only be offset against the group member's profits. Partial depreciation on group members is not deductible. There is, however, the possibility, when the group parent acquires an operational domestic group member, of up to a maximum of 50% of the goodwill of the group member at the level of the group parent over a period of 15 years using the straight-line method.

See also

literature

  • Johanna Hey et al .: Introduction of a modern group taxation - A reform proposal. In: IFSt-Schrift. June 22, 2011, issue 471.
  • Michael Lang , Josef Schuch, Claus Staringer: Basic questions of group taxation. Vienna 2007.
  • Christoph Niehren: Perspectives of the corporate tax group: Further development towards a group taxation against a background of European law. Berlin 2011.

Web links

Germany

Austria

Individual evidence

  1. ↑ Bundesfinanzhof of December 2, 2015 - VR 25/13 DStR 2016, p. 219, accessed on December 27, 2016.
  2. ↑ Federal Fiscal Court of December 2, 2015 - VR 25/13 DStR 2016, page 219, accessed on December 27, 2016
  3. ↑ Bundesfinanzhof from January 19, 2016 - XI R 38/12 DStR 2016, p. 587, accessed on December 27, 2016.
  4. ↑ cf. 2.8 Paragraphs 6-6c of the sales tax application decree
  5. ↑ BFH judgment VR 18/13 of August 6, 2013
  6. ↑ OFD Lower Saxony from April 19, 2013 - S 2770 - 114 - St 248 VD