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 €.
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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)
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