In all cases, subdividing the same activity into several companies is a sign of corporate botch-ups and, in most cases, legal fraud is the crux of the matter, so from a legal standpoint, these related subdivisions are a serious error that, in the long run, creates more problems than advantages.
The case for tax cuts as a justification for corporate splits
The most common example used by bad tax advisors finance and banking email list and company managers is the formalisation of two parallel companies to benefit from the advantages of tax exemptions in the case of the tax on economic activities (no tax is paid if the net amount of the turnover is less than one million euros) or in the case of maintaining the balance sheets and turnover figures within the framework of a small company.
In both cases, if we have two companies A and B, with identical composition of partners, with a common administrator or family ties between the partners, we have the assumption of companies linked for all tax purposes and these parameters determine that the exemption from the IAE or the status of a small company is lost in any tax inspection.
On the other hand, the weighting of the economic cost of maintaining two parallel companies may be higher than the hypothetical tax savings that are achieved. The IAE is an important tax, of course, but it has a relatively low amount for most activities.
On the other hand, having two commercial companies running requires a significant duplication of administrative and management costs. I am thinking of factors such as accounting management, deposits of accounts, consultancies, notarial protocols, registry fees... All these items have a significant amount in annual calculations and in the medium term, the savings can completely disappear.
