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V0161-17 24 January 2017 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · consolidación fiscal

A branch should not be included in a fiscal group if its closure is agreed in the same tax period

The DGT confirms that a German branch does not need to be included in a new corporate tax group if its closure is agreed upon and it ceases to be a permanent establishment.

The question raised

1. Confirmation that the branch must not be included in the tax group in the first tax period of Corporate Income Tax starting from January 1, 2015, provided that its closure proceeds in said tax period.

The DGT's ruling

The branch must not be included in the tax group during the tax period in which the cessation of its activity is agreed and it ceases to be a permanent establishment. The payment of exit taxation due to a change in the allocation of assets may be deferred if the assets are transferred to a Member State of the EU. The anti-loss clause does not apply because there is no legal transfer, but rather a change in allocation. In the period of cessation, the limits on the offsetting of negative tax bases do not apply. The acquisition value for future transfers shall be the market value used for the exit taxation.

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