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Problems in taxation: An optimization approach for loss offset options

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  • Schanz, Sebastian
  • Schmidt, Günter
  • Dinh, Hai-Dung
  • Kersch, Mike

Abstract

We solve an optimization problem which arises in the German tax system. Here losses in some period can be tranferred to other periods reducing tax in these periods. Two variants of taxation can be applied. We formulate the problem as a mixed binary mathematical program and solve it via branch and bound using binary search. Special cases of the problem can be solved by fast polynomial algorithms.

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  • Schanz, Sebastian & Schmidt, Günter & Dinh, Hai-Dung & Kersch, Mike, 2012. "Problems in taxation: An optimization approach for loss offset options," arqus Discussion Papers in Quantitative Tax Research 131, arqus - Arbeitskreis Quantitative Steuerlehre.
    • Handle: RePEc:zbw:arqudp:131
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