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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| Format: | Article |
| Language: | deu |
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Sciendo
2020-05-01
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| Series: | Wirtschaftsdienst |
| Online Access: | https://doi.org/10.1007/s10273-020-2657-8 |
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| _version_ | 1832571520278331392 |
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| author | Reinald Koch Dominika Langenmayr |
| author_facet | Reinald Koch Dominika Langenmayr |
| author_sort | Reinald Koch |
| collection | DOAJ |
| 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. |
| format | Article |
| id | doaj-art-6ba8d7f2b59f43e7a43c484615606385 |
| institution | Kabale University |
| issn | 0043-6275 1613-978X |
| language | deu |
| publishDate | 2020-05-01 |
| publisher | Sciendo |
| record_format | Article |
| series | Wirtschaftsdienst |
| spelling | doaj-art-6ba8d7f2b59f43e7a43c4846156063852025-02-02T12:31:29ZdeuSciendoWirtschaftsdienst0043-62751613-978X2020-05-01100536737310.1007/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 |
| spellingShingle | Reinald Koch Dominika Langenmayr The Tax Treatment of Losses: Options for Reforms During the Corona Crisis Wirtschaftsdienst |
| title | 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_short | 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 |
| url | https://doi.org/10.1007/s10273-020-2657-8 |
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