A consolidated group of taxpayers is The concept and goals of creating a consolidated group

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

In the article below we will get acquainted with such a phenomenon as a consolidated group of taxpayers. We will describe the concept and goals of creating such an association, and also find out how beneficial it is for entrepreneurs.

The concept of a consolidated group

Probably only a stupid businessman does not seek to minimize his obligations to the state in a legal way, finding various loopholes in the current legislation.

Several years ago, the term consolidated group of taxpayers was introduced. An example of such a merger can be seen in such major holdings as Rosneft and Gazprom. Why they? Because it is convenient, profitable and completely legal.

So, the consolidated group of taxpayers is a very specific association, which is characterized by voluntary agreements of income tax payers. Such a syndicate is very interesting because the subjects of entrepreneurialactivities can distribute obligations both by subject area, and cooperate them into a single whole, thereby recreating a single branch. A striking example of the latter is the consolidated group of taxpayers Rosneft.

Also, do not forget that in such associations, the imperative form of management and its implementation as a whole play a significant role. And this also entails the legal subjectivity of legal processes in the form of a zone of responsibility of one or another participant in such an organization as a consolidated group of taxpayers. There are always pros and cons, so it cannot be unequivocally said that such associations are always good, since there are a lot of pitfalls that we will try to bring out.

Classification of consolidated groups

After several years of the implementation of this project, it's time to take a more substantive approach to considering it as such. Therefore, we can safely say that the consolidated group of taxpayers as a financial institution has certain varieties that have certain features.

You can distinguish them from each other both by the classification of tax liabilities, and by industry, and even by the typology of cooperative payers. However, as practice shows, the closest to our reality will be the distribution of groups according to the types of obligations to the budget. Undoubtedly, the most significant and popular among consolidated associations are value added taxes andprofit.

In second place among the grouped payers of state obligations can be identified organizations with a complex management structure (the consolidated group of taxpayers "Gazprom"), in which the head office assumes responsibility for paying the obligations of subordinate branches in part or in full. Most often, in this case, it is income tax that falls under the grouping, since it is the most significant among other payments.

Consolidated group of taxpayers - what is it in the target segment?

If the founders of enterprises have already decided to unite, then, as they say, they must share all joys and sorrows equally. So, for example, the basis for paying income tax will be the usual arithmetic sum of all incomes of group members minus their cooperative expenses. Moreover, if in the final account the base turns out to be a negative amount, then it is considered that the association in this reporting period worked with a loss. In other words, if any of the group of enterprises will take a significant share of their working capital, and at the same time have no profit, then this fact can play a decisive role in calculating the tax base.

Therefore, it should be understood that a consolidated group of taxpayers is a direct path to optimizing the ways of accruing and paying off their own obligations to the state treasury.

Another extra and very enjoyablea bonus in the list of purposes for consolidation is the fact that any of the participants in the cooperative organization does not submit separate declarative data to the fiscal authorities, if it does not have other income not included in the consolidation. This category can include income at other rates, as well as other revenue arising from the withholding or transfer of direct income tax.

Therefore, a simplified tax reporting system is a pretty good reason to unite into a consolidated group. The level of errors in the preparation of declarations in this case will decrease as many times as the number of business entities cooperated in a particular organization. Agree, it is much easier to show the results of the activities of branches in the reporting than separate structures with full administrative responsibility.

Conditions for creation

The fact is that a consolidated group of taxpayers can be created on rather separate conditions, consisting in increased requirements for business entities. Therefore, now we can note the fact that, as such, there are not so many cooperative organizations, despite the various wishes of entrepreneurs. According to the current legislation, namely Art. 25 of the Tax Code of the Russian Federation, the main restrictions on the creation of consolidated groups are as follows:

• If there is such a parent company in the cooperative grouping - the responsible member of the consolidated grouptaxpayers, which owns an impressive share of the authorized capital of other participants (at the moment, the minimum share threshold is 90% of the total mass of the fund).
• The total amount of various excises and duties paid to the state treasury, as well as value added tax, must be at least 10 billion Russian rubles, while this total does not include various obligations transferred to the fund of fiscal authorities for various transactions export-import nature.
• The total amount of revenue received by the combined organization should not be less than 100 billion Russian rubles.
• Both current and non-current assets should be valued in total at more than 300 billion Russian rubles.

In addition to everything else, only those taxpayers who are not exempt from income tax, do not operate in special economic zones, and also pay their obligations to the state on generally accepted grounds, without all sorts of special regimes and simplifications.

Creation procedure

Since a consolidated group of taxpayers is a fully state-controlled association, the procedure for its creation is regulated by the current legislation, namely, Art. 25 of the Tax Code of the Russian Federation. As a rule, when the list of participants in an organization is approved, an agreement is concluded on its creation, while the validity period of it must be at least two calendar years.

A responsible business entity is selected from the members of the group, who is assigned all the existing rights and obligations to pay the accrued total amount of taxes and fees, while this person has the same powers as it is customary to give the most standard payer of income tax. The drawn up document is registered in the fiscal authority, which is located at the place of registration of the selected enterprise.

Since it is accepted to create a consolidated group of taxpayers from the beginning of the new reporting year, you should take care of familiarizing yourself with the documents in advance: according to the current legislation, they must be submitted to the relevant tax organizations before October 30 of the previous period. A correctly executed contract itself can be provided before January 1, that is, before the date from which the association plans to start its joint activities.

Obligations of participants to the state

As noted earlier, the taxation of a consolidated group of taxpayers is carried out through the interaction of the responsible participant with the fiscal authorities at the place of legal registration. At the same time, the due reserve, intended for transferring funds to the state budget, is paid by the members of the association to the selected business entity in accordance with the frequency established in advance. At the same time, according to the current legislation, namely, Article 251 and Article 270 of the Tax Code of the Russian Federation, receivedfinancial receipts are not considered income from statutory activities by the responsible participant.

The very same profit base for calculating taxation has the right to determine a dedicated business entity for other members of the group. This calculation is based on the average data of the number of employees and the total cost of fixed assets, taking into account depreciation charges.

When it comes to directly paying taxes and duties, the chosen business entity must abide by the following principles:

• transfer of funds at the advance stage is carried out based on the location of the responsible participant, which means that they are not distributed among group members in any way;
• if there is an actual basis for taxing profits, the funds are transferred to the treasury of the fiscal authorities at the location of each of the members of the cooperation, with the calculation of the share of all participants in the cooperation fund, as evidenced by the concept of a consolidated group of taxpayers as such.

If the obligations were not paid in full, then the recovery of the missing funds is carried out, first of all, from free funds from the current accounts of the elected member of the association, after - from other participants, and, lastly, in the corresponding order at the expense of existing property.

Tax audits in consolidated groups

When it comes to the usual cameral check, it is nothingdiffers from those carried out at other enterprises. The submitted reporting declarations and other clarifying documents are taken as a basis. However, in the event that, for the completeness of the information under study, there are not enough any acts confirming certain business transactions, then they are provided by the responsible member of the consolidated group of taxpayers in response to a request from authorized representatives of the fiscal authorities. Only an elected member of the association answers any questions and provides various kinds of clarifications.

As for the field tax audit of the consolidated group of taxpayers, it is regulated by the current legislation - Art. 89 of the Tax Code of the Russian Federation. In this legal act, the following key aspects can be distinguished:

• the procedure is carried out on absolutely any territory belonging to one of the members of the association;
• only the fiscal authority located at the location of the responsible participant of the organization can initiate an on-site tax audit, while all economic entities included in the group can be audited;
• it is not forbidden to carry out parallel identical procedures with respect to other participants, aimed at those taxes that are not part of the association;
• the results of the audit are provided to an elected member of the organization, while he also has the full right to put forward various kinds of objections within the time period established by law.

Consolidated group of taxpayers: pros and cons

As we discussed above, taxpayer consolidation is not always a good thing, but nevertheless, let's highlight the positive aspects of this phenomenon:

1. The entrepreneur benefits from the fact that when grouped together, any state control over transfer pricing as such is excluded.
2. Yes, and in general, the desire to put it into practice among business entities disappears because the fiscal authorities are submitted to the cooperative tax reporting of several enterprises.
3. From here follows another positive feature - the time for carrying out various kinds of administrative procedures is reduced.
4. The state is also good - in this way it is possible to reduce the costs aimed at controlling the establishment of market prices for products.

But we must understand that some advantages are utopia, so there are also a number of negative sides:

1. If an enterprise does not have the practice of creating a consolidated group, then this is a rather complicated complex procedure, and there is a rather high risk of doing something wrong.
2. Such organizations can function much longer than desired. And if something goes wrong, then do not forget: according to the current legislation, consolidated groups of taxpayers in Russia can operate for at least two years.
3. It is possible to terminate the merger agreement (if the validity period has not expired) only by a court decision, withthere must be good reasons for this.

Who can consolidate

So, as mentioned above, a consolidated group of taxpayers is a rather complex structure that is not so easy to create, and not every business entity can do it. Earlier, we also listed a number of financial conditions that businesses must meet in order to join in an organization to simplify their own activities in relation to taxation.

Among other things, it is also worth noting that only those enterprises that are not currently undergoing significant reorganization changes and are not in the stage of complete or partial liquidation can create consolidated groups and participate in them. Also, criminal cases of any nature should not be initiated against business entities, and the level of their net income separately should not be less than the amount of the authorized capital declared in the statements.

At the same time, it is also necessary to focus on the fact that all of the above conditions must be observed throughout the entire period of existence of a consolidated group of taxpayers. Otherwise, the contract will be terminated at the initiative of the fiscal authorities in accordance with the court decision.

Who will not be able to consolidate

So, we found out that a consolidated group of taxpayers is recognized as an association of business entities, each memberwhich meets the stated requirements.

Among other things, the current legislation of the Russian Federation singles out a number of business representatives who will never become such an organization. These are:

• business entities that are registered and carry out their main activities in the territory of special economic zones;
• enterprises whose activities are subject to separate tax regimes;
• those business representatives who are already included in another consolidated taxpayer group;
• organizations that have no obligations to the state to pay income tax;
• those legal entities whose profits are subject to a zero rate, in other words, medical and educational institutions;
• Gambling business entities;
• enterprises engaged in clearing activities.

In addition, the current legislation provides for special conditions for combining business entities into consolidated groups of taxpayers, which can be attributed to financial institutions, insurance companies, securities market participants, as well as non-state pension funds. Such entrepreneurs can create their own organizations, but the participants must be involved in the same industry.