Expanded Loss Carryforward Rules

Under current law, offsetting current profits against existing loss carryforwards in income and corporate tax as well as trade tax is only possible up to a base amount of €1 million, and beyond that only up to 60% of the profit exceeding €1 million (so-called minimum taxation). This means: no matter how high a company's loss carryforwards from prior years may be, a tax burden always remains when current profits exceed €1 million in a given year. For jointly assessed spouses (in the area of income tax), the base amount is €2 million.

The current percentage limit of 60% is now to be temporarily raised to 80% for the years 2024 through 2027. The rule is also intended to apply correspondingly to the offsetting of trade tax losses.