The Supreme Tax Court decided that negative income from the financial year in which a harmful acquisition of shares within the meaning of Section 8c Corporation Tax Act takes place is not completely barred as it still can be offset (carried back) against income from the previous year to the extent the losses were incurred prior to the harmful share transfer.
According to a recent judgment of the Supreme Tax Court, Section 2 (4) sentence 3 of the Reorganization Tax Act also prevents offsetting positive income generated during the retroactive period by the transferring legal entity with a loss carry-back of the acquiring legal entity from the following (post-merger) year.
The German Federal Cabinet has released the draft bill on the crisis management package aimed at mitigating the economic impact of the COVID 19 pandemic.
In the night of 3-4 June, coalition partners CDU/CSU and SPD agreed on a crisis management package to mitigate the economic impact of the COVID 19 pandemic.
The Lower Tax Court of Muenster held that losses incurred during the year in which a harmful change in shareholding took place can be carried back to the previous tax year.
A partial compromise was reached by a mediation committee of the two chambers of Parliament leading to a modified Bill for the Revision and Simplification of Corporate Taxation and of the Tax Law on Travel Cost and to acceptance of a modest increase in the basic personal allowance for income tax. The Bundestag has now passed both bills and forwarded them to the Bundesrat for confirmation at its next session, due to be held on February 1, 2013.
The Supreme Tax Court has held that the 1999 introduction of “minimum taxation” rules limiting loss offset by income type do not apply to a 1999 loss carried back to 1998.
