Opportunities for tax transparency

Even without a controlling interest, it is possible in some cases to transfer a company´s profits or losses to shareholders for tax purposes (and the shareholders may themselves be companies). Indeed, with the "tax transparency" system, the income of a company is not taxed in the hands of the company which has derived it, but in the hands of the shareholders in proportion to their participation. Accordingly, with the tax transparency system, also any company losses are attributed to the shareholders reducing their taxable income.

Transparency may be applied to a corporation only if the shareholders are all corporations, each with a holding of at least 10% but no more than 50%. The companies may also be based abroad as long as they are not subject to any tax withholding tax on their distributed profits.

Limited liability companies and limited liability cooperatives qualify for the tax transparency system even if the shareholders are individuals, but only if they are less than 11 (than 21 in the case of cooperatives) and the company has profits not exceeding EUR 5,164,569 ((which is the threshold set for the application of "sector studies").