Loss compensation

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In principle, losses can be carried back for one year and carried forward for nine years.

However, under certain circumstances no loss compensation is available if there has been a shift of 30% or more in the ultimate interest in the entity and the activities have been reduced significantly (>70%).

Furthermore, if the losses are realised from holding or intercompany financing activities (> 90% of the activities are performed as such), these losses can only be compensated in years in which the activities do not deviate from the activities in the loss making years.

We note that the losses of a holding or financing company can only be compensated with the profits of a holding or financing company if the balance of the group receivables minus the group payables (in the year of the loss) is not lower than this respective balance in the profit year. The condition does not apply if the company can demonstrate that this change was not mainly intended to increase the loss set-off possibilities.

In addition, the losses will not be considered to be holding or financing losses if at least 25 employees (fulltime) of the company are involved in other activities.

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