Tax consolidation - liability(Taxwatch (Tax news in english))
22-12-2009 13:56
Af
Karsten Gianelli
SKAT has issued a so called “steer signal”. It describes the rules on domestic tax consolidation pertinent to payment of and collection of corporation taxes. The steer signal contains only one essential piece of news. It is on the other hand pleasant and will have great importance in practice. It concerns the question whether a company has been relieved for liability for corporation tax.
According to the rules this is the case if the company has paid the corporation tax of its income to the administrative company (normally the parent company). Up till now, SKAT has not accepted, that payment could take place by posting on a re bill account, if this involved an increase of the subsidiary’s debt to the parent company. This has now been changed.
SKAT now accepts, that posting on a re bill account may be regarded as a payment “if the posting according to the ordinary law of contracts and torts principles may be regarded as a reel payment”. It does not appear, what should be understood by this. However, as a starting point one has to assume that the condition is fulfilled if the subsidiary is solvent on the time of conversion, so that it – evaluated on the circumstances at this time – is probable that the company can pay its debt to the parent company.
Questions to this article can be directed to Karsten Gianelli on phone 3915 5304 and e-mail kgi@bdo.dk
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