Tax financing agreements also determine tax accounting inflows into the financial statements of tax group members (i.e., deferred tax assets and deferred tax liabilities). If they join the tax consolidation system, business groups need to think about how best to minimize the application of joint and several liability related to group income taxes. They must also consider the extent to which subsidiaries finance the payment of these debts by the main company. Both issues can be managed by business groups through tax-sharing agreements and tax financing agreements. Business groups are encouraged to consider entering into tax-sharing and tax financing agreements as part of their entry into the tax consolidation system. We have developed a wide range of precedents that document tax-sharing and tax financing regimes. Among these precedents, the company is not a party, is not bound by a tax participation agreement, a tax compensation contract or a similar contract, is not related to it, is not bound and has no obligation, whether written or unwritten (collectively “tax-sharing agreements”), nor does it have any potential liability or obligation to a person under a tax sharing agreement. Under the new international financial reporting standards, tax groups must ensure that they have a tax financing agreement that uses an “acceptable allocation method” under the “Urgent Questions” (UIG) group Interpretation 1052 Tax Consolidation Accounting. If the tax financing agreement does not use an “acceptable allocation method,” group members may be required to account for dividends and capital distributions or capital contributions in their accounts. To date, most consolidated tax groups have decided to allocate their income tax commitments based on the fictitious individual taxable income of each member of the group or on the basis of each member`s accounting income as a percentage of the group`s total accounting income.