Tax loss offset restrictions: Last resort for the treasury? An empirical evaluation of tax loss offset rectrictions based on micro data

Nadja Dwenger

No 44, arqus Discussion Papers in Quantitative Tax Research from arqus - Arbeitskreis Quantitative Steuerlehre

Abstract: In Germany, the tax loss carry-forward of corporations significantly increased over the last decade. At the same time only a small percentage of losses have been effectively offset. One potential reason for this puzzle is that stricter loss offset restrictions have been introduced in recent years. I use a newly developed micro simulation model for the German corporate sector to evaluate the fiscal effects of these restrictions. Additionally, distributional breakdowns are provided. I find that the restrictions on the use of tax loss carry-back are rather ineffective while the newly introduced minimum taxation considerably increases yearly tax revenue by 1.1 billion €.

Keywords: micro simulation; loss offset restrictions; corporate taxation; tax loss carryforward; tax loss carry-back (search for similar items in EconPapers)
JEL-codes: C8 H25 (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (8)

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Working Paper: Tax Loss Offset Restrictions - Last Resort for the Treasury?: An Empirical Evaluation of Tax Loss Offset Restrictions Based on Micro Data (2008)
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