Tax Loss Offset Restrictions - Last Resort for the Treasury?: An Empirical Evaluation of Tax Loss Offset Restrictions Based on Micro Data
AbstractIn 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 in the following periods. 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 corporate sector in Germany to evaluate the fiscal effects of these restrictions. Additionally, distributional breakdowns concerning the amounts of tax loss carry-forward and the effects of loss offset restrictions are provided. I find that the restrictions on the use of tax loss carryback are rather ineffective while the newly introduced minimum taxation considerably increases yearly tax revenue by 1.1 billion €.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 764.
Length: 19 p.
Date of creation: 2008
Date of revision:
Micro simulation; loss offset restrictions; corporate taxation; tax loss carryforward; tax loss carry-back; tax reform;
Other versions of this item:
- Dwenger, Nadja, 2008. "Tax loss offset restrictions: Last resort for the treasury? An empirical evaluation of tax loss offset rectrictions based on micro data," arqus Discussion Papers in Quantitative Tax Research 44, arqus - Arbeitskreis Quantitative Steuerlehre.
- H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
- C8 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-02-16 (All new papers)
- NEP-CMP-2008-02-16 (Computational Economics)
- NEP-EEC-2008-02-16 (European Economics)
- NEP-PBE-2008-02-16 (Public Economics)
- NEP-PUB-2008-02-16 (Public Finance)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Altshuler, Rosanne & Auerbach, Alan J, 1990.
"The Significance of Tax Law Asymmetries: An Empirical Investigation,"
The Quarterly Journal of Economics,
MIT Press, vol. 105(1), pages 61-86, February.
- Rosanne Altshuler & Alan J. Auerbach, 1990. "The Significance of Tax Law Asymmetries: An Empirical Investigation," NBER Working Papers 2279, National Bureau of Economic Research, Inc.
- Jack M. Mintz, 1987.
"An Empirical Estimate of Corportate Tax Refundability and Effective Tax Rates,"
Carleton Industrial Organization Research Unit (CIORU)
87-02, Carleton University, Department of Economics.
- Mintz, Jack M, 1988. "An Empirical Estimate of Corporate Tax Refundability and Effective Tax Rates," The Quarterly Journal of Economics, MIT Press, vol. 103(1), pages 225-31, February.
- Titman, Sheridan & Wessels, Roberto, 1988. " The Determinants of Capital Structure Choice," Journal of Finance, American Finance Association, vol. 43(1), pages 1-19, March.
- John R. Graham & Michael L. Lemmon, 1998. "Measuring Corporate Tax Rates And Tax Incentives: A New Approach," Journal of Applied Corporate Finance, Morgan Stanley, vol. 11(1), pages 54-65.
- Alan J. Auerbach, 1985.
"Real Determinants of Corporate Leverage,"
in: Corporate Capital Structures in the United States, pages 301-324
National Bureau of Economic Research, Inc.
- Jeffrey MacKie-Mason, 1988.
"Do Taxes Affect Corporate Financing Decisions?,"
NBER Working Papers
2632, National Bureau of Economic Research, Inc.
- Bradley, Michael & Jarrell, Gregg A & Kim, E Han, 1984. " On the Existence of an Optimal Capital Structure: Theory and Evidence," Journal of Finance, American Finance Association, vol. 39(3), pages 857-78, July.
- Graham, John R., 1996. "Debt and the marginal tax rate," Journal of Financial Economics, Elsevier, vol. 41(1), pages 41-73, May.
- Stefan Bach & Nadja Dwenger, 2007. "Unternehmensbesteuerung: trotz hoher Steuersätze mäßiges Aufkommen," DIW Wochenbericht, DIW Berlin, German Institute for Economic Research, vol. 74(5), pages 57-65.
- Edgerton, Jesse, 2010. "Investment incentives and corporate tax asymmetries," Journal of Public Economics, Elsevier, vol. 94(11-12), pages 936-952, December.
- Walch, Florian & Dwenger, Nadja, 2011. "Tax Losses and Firm Investment: Evidence from Tax Statistics," Annual Conference 2011 (Frankfurt, Main): The Order of the World Economy - Lessons from the Crisis 48699, Verein für Socialpolitik / German Economic Association.
- Dahle, Claudia & Sureth, Caren, 2008. "Income-related minimum taxation concepts and their impact on corporate investment decisions," arqus Discussion Papers in Quantitative Tax Research 55, arqus - Arbeitskreis Quantitative Steuerlehre.
- European Commission, 2010. "Tax Policy after the Crisis: Monitoring Tax Revenues and Tax Reforms in EU Member States 2010 Report," Taxation Papers 24, Directorate General Taxation and Customs Union, European Commission.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Bibliothek).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.