What makes a loss a dual consolidated loss?
Duplication, not size. The concern is a single economic loss that two systems both recognise for the same group, typically because an entity or a branch sits inside a domestic group for one country's purposes while its results also appear in another country's computation. The loss is then capable of reducing income twice, in two unrelated pools of profit, and the rules exist to stop that rather than to deny the loss altogether. Two practical points follow. It is a question about the same expenditure appearing in two computations, so you find it by comparing the two rather than by reading either one alone. And the answer depends on how each country characterises the entity, which is where most of these files actually begin.
Can I use a branch loss in both countries?
Not for the same expenditure, which is the point of the restriction. A branch's loss is generally recognised where the branch operates and also flows into the head office's own computation, and rules in the affected countries are designed to make sure only one of those uses survives. The usual architecture is that the domestic use is available if the group commits that the loss will not also be relieved abroad, and that the commitment is made at the time rather than asserted later. So the choice is real, but it has to be made, documented and then honoured, because a later use of the same loss in the other country is exactly what the rules are watching for.
What counts as a triggering event for a dual consolidated loss?
Broadly, anything that undoes the basis on which the domestic use was allowed. The loss was permitted on the footing that it would not relieve income in the other country, so events that put that in doubt bring the deduction back into charge, usually with an interest cost for the period since it was taken. Disposing of the entity or branch, a change in how it is held or classified, and a use of the same loss abroad are the shapes to watch for. Two consequences for a group. The obligation continues for years after the loss was claimed, so somebody has to be tracking it, and ordinary commercial steps such as a reorganisation can carry a tax cost nobody in the deal team is looking for.
Does the rule apply if the other country never used the loss?
Usually the restriction is about capability rather than actual use, which surprises groups who reason from what happened instead of from what could have. If the loss was available for relief in the other country, the domestic use can be restricted even though nobody claimed anything there, and the answer to the obvious objection is that these rules cannot police intentions. That is why the commitment not to use the loss abroad matters: it turns a capability into a constraint the group has accepted. Where the other country's law genuinely could not have absorbed the loss, that is a position worth establishing in writing at the time, from that country's own law, rather than as an argument years later.
How do I track dual consolidated losses across a group?
Separately from the consolidated result, which is the part that gets missed. A consolidated loss tells you nothing about which entity or branch generated it, and these rules operate on the individual unit. So the record has to be built at that level: what each dual-capable unit contributed, in which year, how much was used domestically, and what commitment was given at the time. It then has to survive staff turnover and system changes for as long as the exposure lasts, which is longer than most groups keep working papers. In practice that means a maintained schedule rather than a folder of prior-year returns, revisited whenever the group's structure changes and not only at year end.
Do the newer anti-hybrid rules replace these loss restrictions?
They overlap rather than replace, and one loss can be caught by either. The older restriction is aimed specifically at a loss recognised twice by one group; the newer anti-mismatch rules are aimed more generally at deductions with no matching inclusion, and at outcomes the two systems together did not intend. A group that tests its position under only one of them can find the other applies to the same figures with a different result. So the practical approach is to compute the loss under both sets of rules before deciding what to claim, and to keep the reasoning, because the two analyses answer to different authorities and neither accepts the other's conclusion as its own.
Is "fund transfer pricing" the same thing as transfer pricing?
No — and if you came here to calculate FTP, this is not it. Fund transfer pricing is a bank's internal allocation of funding costs and benefits between its own business units, a treasury and asset-liability management discipline used to measure branch or product profitability. Tax transfer pricing is about prices between legally separate related parties across borders, and about which country taxes the resulting profit. The words overlap; the fields do not. See our transfer pricing work.
Do I pay tax when I inherit property abroad?
The inheritance itself is often not income to you, but three other things can create tax: the estate may owe tax where the deceased or the property was situated, some countries tax the recipient directly, and the gain from the date you inherit to the date you sell is yours. Reporting obligations can also attach to holding the asset. See inheriting property abroad.
