The Tax Treatment of Losses: Options for Reforms During the Corona Crisis

The Tax Treatment of Losses: Options for Reforms During the Corona Crisis

Abstract Due to the corona pandemic, many companies will suffer losses in 2020. The German tax system treats profits and losses asymmetrically: Whereas profits are taxed immediately, losses do not generate immediate tax refunds. This article discusses different options to improve the tax treatment o...

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Main Authors: Reinald Koch, Dominika Langenmayr
Format: Article
Language:deu
Published: Springer 2020-05-01
Series:Wirtschaftsdienst
Online Access:https://doi.org/10.1007/s10273-020-2657-8
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spelling doaj-6ba8d7f2b59f43e7a43c4846156063852021-05-23T11:23:35ZdeuSpringerWirtschaftsdienst0043-62751613-978X2020-05-01100536737310.1007/s10273-020-2657-8The Tax Treatment of Losses: Options for Reforms During the Corona CrisisReinald Koch0Dominika Langenmayr1Wirtschaftswissenschaftliche Fakultät, Katholische Universität Eichstätt-IngolstadtWirtschaftswissenschaftliche Fakultät, Katholische Universität Eichstätt-IngolstadtAbstract Due to the corona pandemic, many companies will suffer losses in 2020. The German tax system treats profits and losses asymmetrically: Whereas profits are taxed immediately, losses do not generate immediate tax refunds. This article discusses different options to improve the tax treatment of companies in loss situations. A microsimulation of these reforms reveals that extending the maximum amount for loss carry-back has a larger impact than extending the loss carry-back period. Enhancing loss carry-back opportunities also creates strong investment incentives.https://doi.org/10.1007/s10273-020-2657-8
collection DOAJ
language deu
format Article
sources DOAJ
author Reinald Koch
Dominika Langenmayr
spellingShingle Reinald Koch
Dominika Langenmayr
The Tax Treatment of Losses: Options for Reforms During the Corona Crisis
Wirtschaftsdienst
author_facet Reinald Koch
Dominika Langenmayr
author_sort Reinald Koch
title The Tax Treatment of Losses: Options for Reforms During the Corona Crisis
title_short The Tax Treatment of Losses: Options for Reforms During the Corona Crisis
title_full The Tax Treatment of Losses: Options for Reforms During the Corona Crisis
title_fullStr The Tax Treatment of Losses: Options for Reforms During the Corona Crisis
title_full_unstemmed The Tax Treatment of Losses: Options for Reforms During the Corona Crisis
title_sort tax treatment of losses: options for reforms during the corona crisis
publisher Springer
series Wirtschaftsdienst
issn 0043-6275
1613-978X
publishDate 2020-05-01
description Abstract Due to the corona pandemic, many companies will suffer losses in 2020. The German tax system treats profits and losses asymmetrically: Whereas profits are taxed immediately, losses do not generate immediate tax refunds. This article discusses different options to improve the tax treatment of companies in loss situations. A microsimulation of these reforms reveals that extending the maximum amount for loss carry-back has a larger impact than extending the loss carry-back period. Enhancing loss carry-back opportunities also creates strong investment incentives.
url https://doi.org/10.1007/s10273-020-2657-8
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