Virginia Regulatory Town Hall
Department of Taxation
Department of Taxation
Corporation Income Tax [23 VAC 10 ‑ 120]
Amendment of the Corporate Income Tax Regulation to Add a Section Regarding Intangible Expenses Paid to Related Entities
Action 2327
[Withdrawn 1/31/2023]
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.
Executive Branch Review This action will go through the normal Executive Branch Review process.
RIS Project Yes  [000713]
Associated Mandates Intangible Holding Company Addback
New Periodic Review This action will not be used to conduct a new periodic review.
Stages associated with this regulatory action.
Stage ID Stage Type Status
4070 NOIRA Stage withdrawn on 01/31/2023 after the comment period had ended.
Contact Information
Name / Title: John Cox  / Analyst
Address: 600 East Main Street
Richmond, VA 23261
Email Address:
Phone: (804)371-2338    FAX: (804)371-2355