Stückmann Podcast Episode 26: Implementation of a profit transfer agreement & tax recognition of the fiscal unity
Tax groups are a tried-and-tested instrument for offsetting profits within corporate groups. However, what seems clear in theory harbours considerable risks in practice: if a profit transfer agreement is not properly implemented, the tax group can be retroactively revoked – with sometimes serious tax consequences.
In this episode of ‘Taxes to go’, Juliette Gill and Oliver Middendorf explain what really matters when it comes to the actual implementation of a profit transfer agreement and which mistakes should be avoided at all costs.
to go
Topics from the podcast:
Profit transfer agreement
A profit transfer agreement is concluded between two dependent companies to establish an income tax group. The income tax group can be retroactively revoked if the profit transfer agreement is not actually implemented.
2-stage actual implementation
In the first stage, the corresponding liability or claim must be recognised in the balance sheet of both the subsidiary and the parent company. In the second stage, the liability or claim must be settled.
Pitfalls in the actual implementation of the profit transfer agreement
In this podcast, we highlight potential pitfalls in the implementation of the profit transfer agreement, discuss alternatives to fulfilment through liquidity, and address the implementation period.
