A common question among businesspeople participating in consortia concerns the tax aspect. After all, how are business consortia taxed, since there is no legal personality in this format?
First of all, it is important to clarify that a business gambling data pakistan consortium is an organizational model in which two or more companies come together to carry out a project or participate in a specific business purpose – carrying out a project, participating in bids, providing services, etc.
The formation of a consortium is done in a structured, agreed manner, so that all issues relating to the administration of the consortium (for example, responsibilities of the consortium members and revenue sharing) are set out in a contract signed between the participating companies.
The consortium has a set duration, that is, it ends with the execution of the project or purpose for which it was created. Although its registration with the CNPJ (In SRF 1/2000) has become mandatory, the consortium does not have its own legal personality, which leads to the following question: “How are its obligations and tax liability defined?”
Delimitation of tax responsibilities of consortia and compliance with obligations
The taxation of business consortia deserves special attention, especially regarding tax liability, since the lack of legal personality of the consortium reveals the legal-tax autonomy of each of the consortium members, that is, each of the participating companies will be responsible for fulfilling tax obligations to the extent of their participation.
In short, regardless of the activity carried out by the consortium, each participant will maintain their fiscal individuality, both in terms of the calculation of taxes, to the extent of their participation in expenses and revenues, and in terms of subjection to the adopted taxation regime.
The cases of joint and several tax liability admissible in a consortium refer solely to cases of retention and compliance with accessory obligations in contracts entered into in the name of the consortium itself or through a leading consortium member.
However, in some cases, particularly when there is no contractual provision regarding the duration and purpose of the consortium, it is possible to disregard the constitution of this consortium for tax purposes. The tax authorities understand that, in these circumstances, the consortium would resemble an irregular partnership agreement, so that there would be joint liability for tax obligations.