The fiscal group for CIT purposes consists of at least two of the following entities:
The consolidation system can be applied for a period of five fiscal years, starting with the next fiscal year following the one when the request is submitted. The system is optional, and the application must be submitted at least 60 days before the start of the fiscal consolidation period.
Certain cumulative conditions must be met when the request application is submitted, such as:
Each member of the fiscal group determines the fiscal result individually, whereas the consolidated fiscal result of the group is determined quarterly/annually by totalling the fiscal results determined individually by each member of the fiscal group.
CIT due by the group is computed by applying the CIT tax rate of 16% on its taxable profits, namely the positive consolidated fiscal result.
A group leader will be responsible for computing the consolidated fiscal result of the group and it will submit CIT returns/pay the due CIT on behalf of the group.
The individual fiscal credits (e.g. sponsorships), the exempted profits (e.g. for reinvested profits) determined by each member of the group will be communicated to the leader of the group in order to be deducted from the overall CIT. Similarly, the fiscal losses incurred by a group member during the consolidation period are deducted from the consolidated fiscal result of the group.
Special rules are provided both for entering/leaving the fiscal group (including use of fiscal losses before the group consolidation) and for cases in which the members of the group no longer meet the mandatory conditions during the five-year mandatory period of the group.
Nevertheless, each member of the fiscal group is still compelled to prepare the transfer pricing file regarding the transactions with the members of the fiscal group and with other related entities outside the fiscal group.
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