On 9 March 2018, the Ministry of Finance (MoF) clarified the deduction of losses incurred by consolidated group members. Accordingly, the MoF stated that, under article 278.1(1) of the Tax Code (TC), the tax base of a consolidated group of taxpayers is the sum of the tax bases of all group members. However, income of the members of the consolidated group that is subject to withholding tax at source is not included in the consolidated tax base.
From 1 January 2017 losses incurred by the members of a group may be deducted from the consolidated tax base in the current tax period, but cannot be deducted from more than 50% of the consolidated tax base.
The remaining losses are divided between the members of the group and may be carried forward to reduce their tax bases in future periods. For tax periods from 1 January 2017 to 31 December 2020 the tax base in the current tax period (except the corporate tax base subject to reduced corporate income tax rates) may not be reduced by more than 50% by losses brought forward from previous tax periods.
