ARTICLE – 40 – CASE SCENERIOS
A Inc. is a newly made subsidiary of Y Inc.. Y Inc. was a parent company and covered under a Tac Group. In present case, A Inc., wants to become the member of the tax group, what procedure, it would have to follow:
Solution:- In the present case, Article 41 shall ba applicable and accordingly, the application has to be made to the Authpoority to become the member. The Authority shall decide the beginning of the date, from when, it would be considered as the part of Tax Group either it can be the date as specified in the application or at the discretion of the Authority.
State the conditions to be fulfilled for creating the tax group having a parent company to represent the tax group and with other 5 subsidiaries to form the part of it. Explain the criteria to fulfill for the same.
Solution:- As per the Article – 40, the clause 1 prescribes for the following criteria must be fulfilled, in order to create a tax group which will be later represent by the Parent company, the conditions for the same are as follows:-
- Resident Person are Juridical Person
- Parent company owns at-least 95% of:-
- share Capital; and
- voting power; and
- Profits and Net Assets,
in the subsidiary company, , either directly or indirectly through one or more subsidiary
- Neither the Parent nor Subsidiary company covered under:-
- the Exempt Person
- Qualifying Free zone Person
- Both the parent and subsidiary company:-
- Having the same financial year
- Using the same accounting standards
