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Adjustment of loss settlement for corporation tax as of January 1, 2022

The 2021 Tax Plan includes an adjustment to the loss settlement in corporate income tax. Losses can be set off against the taxable profit of the previous year, the so-called loss carry-back, and against taxable profits of subsequent years: the loss carry-forward. The adjustment means that the loss carry forward is unlimited over time. Insofar as the deductible losses amount to more than € 1 million, they are settled up to an amount of 50% of the taxable profit after that profit has been reduced by an amount of € 1 million. Losses of up to €1 million are fully recoverable. Loss carry-back is limited to the previous year. The limitation for losses above an amount of € 1 million also applies to the carry-back of losses. The adjustment of the loss carryforward will take effect on 1 January 2022. The amendments apply to losses from financial years that commenced on or after 1 January 2013, insofar as these losses are offset against taxable profits from financial years commencing on or after 1 January 2022.

The decision to enter into force this part of the Tax Plan was published in the Official Gazette on 4 June.

Source: Ministry of Finance | decision | Official Gazette 2021, 257 | 03-06-2021