Fiscal unity (fiscale eenheid)
A fiscal unity is a tax regime in which affiliated companies are treated as one taxpayer for a tax, under conditions.
What does fiscal unity mean?
A fiscal unity is a tax regime in which affiliated companies are treated as one taxpayer for a tax, under conditions.
Different rules apply for corporate income tax and VAT. A fiscal unity is not automatically consolidated annual accounts; commercial reporting is assessed separately.
How does it work?
For corporate income tax, parent and subsidiary are, on joint request, taxed as if there were one taxpayer; the tax is levied on the parent (art. 15(1) Corporate Income Tax Act 1969). The parent has legal and economic ownership of at least 95% of the shares, with at least 95% of the voting rights, the profit and the assets. The subsidiary no longer files its own return, but is jointly and severally liable for the tax of the unity (art. 39 Collection of State Taxes Act 1990).
The fiscal unity for VAT is a different arrangement: entrepreneurs who are financially, organisationally and economically interlinked are designated by decision as one entrepreneur (art. 7(4) VAT Act 1968).
Example
Holding BV has a taxable profit of € 180.000 in 2026, its 100% subsidiary Werk BV € 150.000. Separately, each pays 19%: € 34.200 + € 28.500 = € 62.700. As a fiscal unity the profit is € 330.000: 19% on € 200.000 (€ 38.000) plus 25,8% on € 130.000 (€ 33.540) = € 71.540. The unity costs € 8.840 here, because the low rate applies only once. If Werk BV instead incurs a € 50.000 loss, the joint tax falls to 19% of € 130.000 = € 24.700.
In the annual accounts
Tax return and tax position; no separate balance sheet item.
Difference from consolidation
A fiscal unity is a choice for tax assessment; consolidating is a reporting obligation for which the group relationship and control count (art. 2:406 DCC), not 95% ownership. The subsidiary therefore still prepares and files its own annual accounts, unless the group exemption has been arranged.
Common mistakes
- Equating the corporate income tax and VAT unity
- Treating the fiscal unity as a 403 exemption
What to watch for
- The unity ends as soon as the requirements are no longer met (art. 15(10) Corporate Income Tax Act 1969); issuing more than 5% of the shares to an investor is enough.
- In the company annual accounts the group allocates the tax to each company, usually as if it were independently liable for tax.
- From small upward, the entity states the joint and several liability among the off-balance-sheet obligations (art. 2:381(1) DCC); that disclosure requirement does not apply to micro entities (art. 2:395a(6) DCC).
Legal basis and source
Corporate Income Tax Act 1969, art. 15
Frequently asked questions
Does the low corporate income tax rate apply per company within the unity?
No. The unity is taxed as if there were one taxpayer. In 2026, 19% applies once to the first € 200.000 of joint profit and 25,8% to the remainder.
Until when does liability within a VAT group continue?
Until the inspector has been notified in writing that the unity no longer exists. Until then the members remain jointly and severally liable (article 43(1) Collection of State Taxes Act 1990).
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