Reform of the tax consolidation regime (5% or 1% share of costs and charges)

Article 32 of the 2019 Finance Act reforms the tax consolidation regime following rulings of the Court of Justice of the European Union that found some of its advantages contrary to freedom of establishment. The share of costs and charges on dividends under the parent-subsidiary regime is set at 5%, reduced to 1% for income received by a group company or from a company subject to an equivalent tax in an EU or EEA state. Several group-specific neutralisations are removed. Applicable to financial years beginning on or after 1 January 2019.