Group taxation and group relief

Legally, each German company is an independent legal entity and is therefore
required to file its own tax returns. There is no concept of filing a consolidated
return as such, although if two or more entities are so closely inter-linked that
they can be seen as being effectively a single business, they combine their
results for tax purposes, that is, they pool profits and losses. However, they do
not eliminate intercompany profits.

This type of group is referred to in
Germany as an Organschaft.