Group treatment

Group Treatment – In taxation, group treatment refers to the approach of treating multiple related entities or transactions as a single entity for tax purposes. This concept is commonly applied in scenarios such as: Consolidated tax returns – affiliated or parent-subsidiary companies file a combined return, allowing profits and losses across the group to be offset. Related-party transactions – certain dealings between entities within a group are treated collectively to determine tax liability, ensuring compliance and preventing tax avoidance. Group treatment facilitates simplified tax reporting, coordinated tax planning, and equitable assessment of liabilities across corporate structures or related entities.

Example: A parent company and its subsidiary may file a consolidated tax return, offsetting the subsidiary’s losses against the parent’s profits, reducing overall tax liability