Loss relief
For corporation, but not trade, tax, taxpayers may claim a loss carryback of up
to €1,000,000 to the previous year. This is an option and not a requirement.
Amounts not carried back may be carried forward and utilised against future
profits without time limit. The relief claimable in each year from losses brought
forward is limited to €1 m plus 60% of the current taxable income exceeding
that amount. Companies with annual profits of more than €1 m thus face
current taxation on 40% of the excess. This is referred to in Germany as
“minimum taxation”.
However, the loss relief claimed in any one year from a
loss brought forward does not reduce that subsequently claimable in retrospect
against the remaining profit of the same year from a loss brought back.
The carry-forward and its offset rules apply to both trade and corporation taxes.
EU Forecast
euf:ba18e:162/nws-01