How can I claim losses on corporate tax?
October 26, 2023 | 50,00 EUR | answered by Benjamin Hohenadel
Dear tax advisor,
I am Maria Kohlstein, the managing director of a medium-sized company. In recent years, we have unfortunately incurred losses and I am wondering how I can claim these losses for corporate tax purposes.
The current situation of our company shows that we have had to record losses due to various factors such as a decrease in revenue or higher costs. These losses burden our balance sheet and I am now wondering how we can use them for tax purposes to improve our financial situation.
My concerns lie mainly in not wanting to leave the losses unused and wanting to know what options there are to claim them for corporate tax purposes. It is important to me that we exhaust all legal possibilities to reduce our tax burden and improve our liquidity.
Therefore, I request your expertise and support to explain to me how we can claim losses for corporate tax purposes. What steps do we need to take for this and what documents are required? Are there any specific deadlines that we need to adhere to? I would be very grateful if you could provide me with specific advice and tips on how to reduce this tax burden.
Thank you in advance for your help.
Sincerely,
Maria Kohlstein
Dear Ms. Kohlstein,
Thank you for your inquiry regarding claiming losses for corporate tax in your medium-sized company. It is understandable that you are looking for ways to improve your financial situation and reduce your tax burden. I am happy to explain to you how you can claim losses for corporate tax.
Firstly, it is important to know that losses from previous years can generally be offset against profits from other years. This is called loss carryforward. You can either offset the losses against profits from past years or carry them forward into the future and offset them against future profits. This will reduce your tax burden.
To claim losses for corporate tax, you need to declare them in your tax return. You will need the relevant documents that show how the losses occurred and in what amount they exist. These documents include profit and loss statements, balance sheets, and other business analyses. It is important that these documents are complete and accurate to avoid any possible inquiries from the tax office.
There are no specific deadlines by which you must claim losses for corporate tax. You can generally offset losses in the year they occurred or carry them forward into the future. However, it is advisable to declare the losses promptly in your tax return to not miss out on any tax benefits.
In summary, you can claim losses for corporate tax by declaring them in your tax return and offsetting them against profits. It is important to have all the necessary documents ready and not leave any potential losses unused.
I hope this information has been helpful to you. Please feel free to reach out if you have any further questions.
Sincerely,
Benjamin Hohenadel
Tax Advisor
