Post by account_disabled on Mar 9, 2024 8:24:12 GMT
The taxation of corporate groups was analyzed from a practical perspective with a prominent focus on the tax consolidation regime and VAT groups, their advantages and disadvantages, as well as the interconnection between tax groups and mergers and acquisitions operations (M&A)" 12 February, 2024 Company Law, Fiscal, News, Summaries And Proposals Fide An interesting session took place on January 29 Fide titled "Taxation and Groups of Companies. Issues of Interest on Taxation, M&A Operations and Liability Assumptions”. This session was part of the “Forum Challenges of Groups of Companies”. He participated as a speaker Fernando Muñoz del Campo, Partner at BDO Abogados. Moderated Jose Maria Roji, Partner of the Commercial Department at CMS Albiñana & Suárez de Lezo and Academic Advisor of Fide and Academic Director of this forum. The objective of the session was analyze from a practical perspective, the taxation of groups of companies with a prominent focus on the tax consolidation regime and VAT groups, their advantages and disadvantages, as well as the interconnection between tax groups and mergers and acquisitions operations.
Firstly, the different perimeters, requirements and characteristics that define “groups of companies” in tax and commercial regulations were analyzed, precisely highlighting the conditions that must be met for a company to be considered part of the group for tax purposes. There was debate about the concept of “control” in both regulations and, in particular, the consequences of a company belonging UK Phone Number to the group from a commercial law perspective, but not acquiring said status, from a tax law perspective. Once the conceptual perimeter of the group of companies was analyzed, the main characteristics of the types of group of companies were established, that is, the groups of companies to which VAT effects and the groups for the purposes of consolidation in the Corporation tax. From a practical perspective, the possibilities offered by both types of groups were explained, as well as those elements that must be analyzed before applying a tax consolidation regime. In particular, also of a tax nature, such as the application of the fiscal neutrality regime.
In this sense, the importance of analyzing the true nature of the intended transfer was emphasized, in order to avoid undesired tax consequences. Likewise, other typical operations of an M&A process were analyzed, such as global transfers of assets and liabilities, securities exchanges, participatory loans or branch of activity contributions, where, among other issues, the controversial concept of “valid economic reason” and the main factors that increase the risk of a potential inspection, such as the transfer of tax credits or negative tax bases. In the context of M&A operations, the potential responsibility of the acquiring company, when it acquires a company that is part of a group of companies, as well as the typical protection mechanisms of these operations, such as the execution of Side Letters. Lastly, there was discussion on the liability regime applicable to group companies, when one or more are subject to sanctions by the tax authorities. The criterion of the “knowledge”, as an essential element of the imputation of responsibility to group companies other than the infringing ones, as well as the potential liability of directors as a result of the non-delegable nature of the functions related to taxation. Following this, there were several interventions by the attendees, especially in relation to the informative note issued by the Tax Agency of May 5, 2023, in relation to the application by the tax consolidation group of negative tax bases and deductions from previous years.
Firstly, the different perimeters, requirements and characteristics that define “groups of companies” in tax and commercial regulations were analyzed, precisely highlighting the conditions that must be met for a company to be considered part of the group for tax purposes. There was debate about the concept of “control” in both regulations and, in particular, the consequences of a company belonging UK Phone Number to the group from a commercial law perspective, but not acquiring said status, from a tax law perspective. Once the conceptual perimeter of the group of companies was analyzed, the main characteristics of the types of group of companies were established, that is, the groups of companies to which VAT effects and the groups for the purposes of consolidation in the Corporation tax. From a practical perspective, the possibilities offered by both types of groups were explained, as well as those elements that must be analyzed before applying a tax consolidation regime. In particular, also of a tax nature, such as the application of the fiscal neutrality regime.
In this sense, the importance of analyzing the true nature of the intended transfer was emphasized, in order to avoid undesired tax consequences. Likewise, other typical operations of an M&A process were analyzed, such as global transfers of assets and liabilities, securities exchanges, participatory loans or branch of activity contributions, where, among other issues, the controversial concept of “valid economic reason” and the main factors that increase the risk of a potential inspection, such as the transfer of tax credits or negative tax bases. In the context of M&A operations, the potential responsibility of the acquiring company, when it acquires a company that is part of a group of companies, as well as the typical protection mechanisms of these operations, such as the execution of Side Letters. Lastly, there was discussion on the liability regime applicable to group companies, when one or more are subject to sanctions by the tax authorities. The criterion of the “knowledge”, as an essential element of the imputation of responsibility to group companies other than the infringing ones, as well as the potential liability of directors as a result of the non-delegable nature of the functions related to taxation. Following this, there were several interventions by the attendees, especially in relation to the informative note issued by the Tax Agency of May 5, 2023, in relation to the application by the tax consolidation group of negative tax bases and deductions from previous years.