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parent company loss deduct from subsidiary company proft
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Answer Posted / sushmita goyal
In principle, every company pays its own corporation tax. However, if a parent company forms a tax group with one or more of its subsidiaries, the Tax and Customs Administration will on request treat the companies as a single taxpayer.
The main benefit of a tax group is that a loss incurred by one company can be deducted from the profits earned by other companies in the group.
The formation of a tax group is subject to certain conditions. The main condition is that the parent company holds at least 95% of the shares in the subsidiary. In addition, the parent company and subsidiary must:
have the same financial year;
apply the same accounting policies;
be established in the Netherlands.
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