Fiscal consolidation: do's and don'ts for the intra-group transfer regime

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Introduced by Belgium's 2017 corporate tax reform, the intra-group transfer regime offers a limited form of fiscal consolidation. Since March 2025, a ruling by the Court of Justice of the European Union has changed the landscape for the deduction of definitively taxed income (DTI). Here is an overview of how the regime works and what has changed. 
 

Transfer of profits 

Under the intra-group transfer regime, the core principle is straightforward: a profitable company within a group can transfer (part of) its profits to another group company that has incurred losses during the same tax year. The transferred profit is referred to as an "intra-group transfer". The transferring company can deduct the amount from its taxable income, while the loss-making company includes the transfer received in its taxable income. 

The objective? The profitable company pays less tax and the loss-making company carries forward fewer (or no) losses to the next financial year. 

Please note: intra-group loss compensation is only possible for the taxable period covered by an intra-group transfer agreement (see box). 

"The intra-group transfer does not generate savings for the profitable company." 

Consideration

Every transfer within a group requires consideration in return. The profitable company must pay compensation to the loss-making company (a mere debt registration without actual payment is not sufficient). The compensation must be equal to the amount of tax the profitable company saved through the operation.  

In other words, the intra-group transfer does not generate savings for the profitable company. The advantage is felt at group level. The tax savings remain within the group (the loss-making company receives the compensation) rather than being collected by the tax authorities. 

Limited consolidation

Unlike full fiscal consolidation, the intra-group transfer regime does not allow related companies to file a joint tax return or be taxed as a single entity. It only creates the possibility of shifting the taxable base between companies within the same group. From a tax perspective, each company files its own return and is taxed separately. 

Who is eligible?

Companies (or establishments) must be related in order to benefit from the intra-group transfer regime. In practice, they must qualify as parent, subsidiary or sister companies for an uninterrupted period of 5 years, with a minimum participation requirement of 90%. 

Belgian and foreign companies, as well as Belgian establishments of foreign companies within the European Economic Area (EEA), are eligible for the regime. 

The legislator has introduced several important restrictions and exceptions:  

  • The regime only applies between related companies with a sufficient participation.A sufficient participation means:    
    • a parent-subsidiary relationship in which at least 90% of the subsidiary's shares are held directly by the parent company; 
    • sister companies whose common parent company is established in the EEA and directly holds at least 90% of the shares. If several companies are entirely owned by a natural person, they are not considered related sister companies.  
  • The required participation must exist for an uninterrupted period of at least 5 years. This period starts on 1 January of the fourth calendar year preceding the calendar year that designates the tax year. 
    Example: an intra-group transfer for the 2025 financial year (2026 tax year) requires an uninterrupted 90% participation from 01/01/2022 to 31/12/2026.   
  • The required participation must exist for an uninterrupted period of at least 5 years. This period starts on 1 January of the fourth calendar year preceding the calendar year that designates the tax year.  
    Example: an intra-group transfer for the 2025 financial year (2026 tax year) requires an uninterrupted 90% participation from 01/01/2022 to 31/12/2026. 
  • Companies that provide real estate (or any other real right relating to such property) to their directors are expressly excluded from the regime. 
  • The profits of a resident company may offset the definitive professional losses of a foreign group company, provided that:   
    • the foreign company is established in the EEA and is not subject to a tax regime that deviates from ordinary tax law; 
    • the foreign company has definitively ceased its activities, and those activities are not taken over by another group company within 3 years of cessation; 
    • an intra-group transfer agreement is concluded with the foreign company. The amount of the intra-group transfer in the agreement may not exceed the professional loss incurred by the foreign company during the taxable period in which activities were definitively ceased. If that loss, determined under Belgian tax law, has been deducted in whole or in part by the foreign company or by another person, it is limited to the portion not yet deducted.  

Tax return

The profitable company must attach the intra-group transfer agreement (form 275 CTIG) to its corporate tax return in order to obtain the deduction. If companies wish to apply the intra-group transfer for several consecutive tax years, they must conclude a new agreement (meeting the conditions outlined above) for each tax year. 

The fact that the financial years of the companies concerned cover the same period is not relevant. The only requirement is that the transfer agreement relates to the same tax year. The law does not specify when the agreement must be concluded, but logically it should be signed before the corporate tax return is filed. 

New development: fiscal consolidation and DTI deduction 

The definitively taxed income (DTI) regime, derived from EU Directive 2011/96/EU (the "Parent-Subsidiary Directive") of 30 November 2011, aims to ensure the tax neutrality of dividend distributions between a parent company and its subsidiaries within the European Union. 

Until recently, the Belgian Income Tax Code prohibited the deduction of DTI from the amount of an intra-group transfer received by a company. As a result, the dividend exemption provided for by the Directive was not fully achieved and the parent company faced indirect taxation on the dividends received. 

In its ruling of 13 March 2025 (C-135/24), the Court of Justice of the European Union found this Belgian provision to be in breach of EU law. 

Following this ruling, the law of 18 December 2025 amended Article 206/3 of the Income Tax Code. The prohibition on offsetting DTI against the share of the taxable base received through the intra-group transfer has been removed. In practice, the DTI deduction can now be applied to the portion of the transfer that exceeds the negative result established before the transfer is included. 

Retroactive effect

Although the law was enacted on 18 December 2025 and published in the Belgian Official Gazette on 30 December 2025, the regime can already be applied to prior tax years on the basis of the CJEU ruling. The Parent-Subsidiary Directive has direct effect in Belgian law, meaning any national provision found to be contrary to EU law must be set aside. 

The explanatory memorandum to the law of 18 December 2025 confirms this: given the retroactive effect of the ruling, the legislative amendment already produces its effects de facto. No specific entry-into-force provision was deemed necessary. 

What can you do in practice?

If, during a previous taxable period, one company in your group carried forward DTI while another had a taxable base, the situation can be corrected. You may, for example, file a claim within the year following the dispatch of the tax assessment notice for the relevant tax year. 

Has that deadline passed? A request for ex officio relief remains possible for up to five years from 1 January of the year in which the tax was assessed. In 2026, it is therefore still possible to file requests for tax assessment notices received in 2022. 

Optimise your group's tax position 

Our experts can help you implement and regularise the intra-group transfer regime. 

Frequently asked questions

The intra-group transfer regime is a form of fiscal consolidation. It allows a profitable company within a group to transfer part of its profits to another group company that has incurred losses during the same tax year. The profitable company reduces its taxable base, while the loss-making company includes the amount received in its taxable income. 

The companies must be related through a direct participation of at least 90% (parent-subsidiary or sister companies). This participation must exist uninterrupted for at least 5 years. Companies that provide real estate to their directors are excluded from the regime. 

The companies involved must conclude an agreement for each tax year. The agreement specifies the amount of the transfer and the commitments of both parties. The profitable company must attach the agreement (form 275 CTIG) to its corporate tax return. 

No. The profitable company must pay the loss-making company compensation equal to the tax saved. The advantage lies at group level: the amount that would otherwise go to the tax authorities stays within the group. 

Previously, Belgian tax law prohibited this. The CJEU ruled that this prohibition was contrary to EU law (Parent-Subsidiary Directive). The law of 18 December 2025 amended Belgian legislation accordingly. The DTI deduction can now be applied to the portion of the intra-group transfer received. 

Yes. The Parent-Subsidiary Directive has direct effect in Belgian law, meaning the conflicting national provision must be set aside — including for tax years prior to the law of 18 December 2025. A claim or request for ex officio relief can be filed to regularise previous tax years, subject to statutory deadlines.  

You have five years from 1 January of the year in which the tax was assessed. In 2026, for example, it is still possible to file a request for tax assessment notices received in 2022. 

Yes, but only to offset the definitive professional losses of a foreign company established in the EEA. The foreign company must have definitively ceased its activities, and those activities must not be taken over by another group company within 3 years. 

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