Agencies | Governor
Virginia Regulatory Town Hall
Agency
Department of Taxation
Board
Department of Taxation
chapter
Corporation Income Tax [23 VAC 10 ‑ 120]
Action:
Amendment of the Corporate Income Tax Regulation to Add a Section Regarding Intangible Expenses Paid to Related Entities
 
General Information
Action Summary Legislation in the 2004 Session of the General Assembly (2004 Acts of Assembly, Special Session I, Chapter 3) amended the corporate income tax law by adding Code of Va. § 58.1-402 B(8) and (9), which require the corporation to add back any royalties and interest paid to a related entity in such a situation. The amendments contain a number of safe harbors to prevent the addition from applying to legitimate transactions that are not for the purpose of tax avoidance. In addition, if a corporation does not qualify for one of the safe harbors, but believes that an addition is unreasonable as applied to its legitimate transactions, it may apply to the Tax Commissioner for a waiver of the addition requirement and a refund of tax paid on the amounts added back to Virginia taxable income. This regulatory action will add a regulation section interpreting Code of Va. § 58.1-402 B (8) & (9).
Chapters Affected Only affects this chapter.
Exempt from APA No, this action is subject to the Administrative Process Act and the standard executive branch review process.
RIS Project Yes  [000713]
Associated Mandates Intangible Holding Company Addback
 
Stages
Stages associated with this regulatory action.
Stage ID Stage Type Status
4070 NOIRA Stage complete. Comment period ended 9/19/2007.
 
Contact Information
Name / Title: John Cox  / Analyst
Address: 600 East Main Street
Richmond, VA 23261
Email Address: john.cox@tax.virginia.gov
Phone: (804)371-2338    FAX: (804)371-2355