Provisions
March 13, 2011 | 50,00 EUR | answered by Dipl.BW/SB Ulrich Stiller
Urgent!
The tax return for 2009 is currently being finalized.
Self-employed (agriculture = loss, commercial side business - eggs + poultry), jointly assessed with spouse.
"Profit" 09: 35000
Goal: Avoid Ek tax payment in 11.
Option mentioned by the "consultant" over the phone:
Create reserves.
Question: Is it possible, if so, in both areas of activity, or only in one? Risks regarding creditworthiness/rating?
Any other options?
Best regards
Dear advice seeker,
Thank you for your inquiry, which I would like to answer based on your information and in the context of your commitment in a first consultation as follows:
Provisions are understood as obligations that
a) are not certain in terms of reason and
b) are not certain in terms of amount and
c) are not certain in terms of timing.
Tax law only allows for the creation of provisions if they must be created in accordance with commercial law: therefore, you can create provisions for:
Uncertain liabilities.
Potential losses from pending transactions.
Deferred maintenance that will be caught up within 3 months in 2010.
Land clearance in 2010.
Guarantees provided without legal obligation.
In your case, provisions (exemplary list) could be created for:
Corporate tax payments
Costs for the preparation of corporate tax returns (excluding income tax returns)
Provisions for annual financial statement costs
In order to determine which provisions can be created, detailed knowledge of the operational circumstances is required.
You can create provisions if you have determined the profit through accounting. In the case of a simplified profit determination, known as profit determination according to § 4 paragraph 3 EStG, the creation of provisions is not possible.
You can also create an investment allowance in 2009 for both activities, regardless of the type of profit determination. Outside of profit determination, you can deduct 40% of planned purchases of depreciable movable assets as a deduction from profit, if these investments are made by December 31, 2012. Details are regulated in § 7g EStG. If you do not invest by December 31, 2012, your tax assessment for 2009 will be retrospectively changed, resulting in only a tax deferral. Your tax advisor can provide detailed advice on this matter.
I hope I was able to assist you with my explanations.
Best regards,
Ulrich Stiller
Tax consultant/Diploma in Business Administration
