In accordance with the acquis rights protection rule that accompanied the amendment of the law, the revised requirement is mandatory for the recognition of a consolidated tax group for all EPAs concluded or amended after 26 February 2013; However, it is not necessary to amend the PGPs closed before that date. However, if the loss-absorbing provision in a PLPA before 23 February 2013 did not meet the requirements of the previous right, the defect can be corrected by: the documentation (local file and parent file) must not be established at the time of the transaction or as part of a tax return, but must be provided on request during an audit. In the event of exceptional incidents (e.g.B. However, documentation must be prepared within six months of the end of the financial year in which the transaction took place (but it must only be provided upon request as part of an audit). The tax-bound consolidated regime in Germany is based on a legal concept and has tax, legal and accounting consequences. One of the prerequisites for the formation of a tax consolidated group is that members must subscribe to a PLPA valid for at least five years. A PLPA requires a controlled subsidiary of a group to automatically transfer its annual profit to the controlling parent company; If the controlled enterprise has suffered losses, the dominant enterprise must compensate the subsidiary for those losses. the PLPA must contain the appropriate text for the agreement to be valid; Failure to use the corresponding wording could lead to the invalidation of tax consolidation, so that companies that are part of the PLPA could be taxed on a stand-alone basis rather than on a consolidated basis. Where a parent company holds more than 50% of the voting rights in a subsidiary established in Germany, these two companies may conclude a profit and loss pooling contract (PLPA) officially registered by the courts, which must be concluded for a period of at least five years. When certain conditions are met, the resulting relationship is called an institution.
Indeed, the annual results of an institution are grouped at the parent level. The subsidiary of the tax group itself is taxable only for 20/17 of the remuneration paid to external minority shareholders, if any. Profits and losses within a group can therefore be offset, but there are no plans to eliminate intra-group profits from the total tax base. It should also be noted that negative income of the parent enterprise or subsidiary incurred within an institution is excluded from offsetting in the same or another year if a foreign country takes it into account in the taxation of an organ member or other entity. . . .