“A chapter that is still open but seems to be on the finishing straight and could be implemented early next year is the so-called fiscal consolidation of the intra-group profit, which, if implemented, will allow companies in the same group to offset their fiscal profits and losses,” said Lucian Barbu, tax partner with the tax advisory department of law firm NNDKP.
This measure requested by the business sector could be a breath of fresh air for companies, so losses of one company in a group could be offset with the profits of another and the profit tax calculated after consolidation.
For instance, if company X in a group posts 150 lei profit and company Y in the same group posts RON100 loss, the profit tax the group pays in 2018 is RON24 (16% profit tax x RON150). If fiscal consolidation comes into force in 2019, the profit tax will be RON8 (16% x RON50, the profit remaining after offsetting X’s RON150 profit and Y’s RON100 loss).
(English version by Loredana Fratila-Cristescu)