(01.11.2023) Following the pandemic, Parliament is calling for an extension of the loss compensation period for businesses from seven to ten years. This change is necessary because, under current regulations, businesses may find themselves unable to offset some of their losses with future profits. The Federal Council has meanwhile established the necessary legal foundations and submitted them for consultation. The extra-parliamentary commission of experts SME Forum shows a positive opinion on this proposal.
The SME Forum particularly welcomes the positive impacts this measure will have on the competitiveness and resilience of businesses. It states that it will better uphold the constitutional principle of taxation based on economic means. Experts also believe that the new law will particularly benefit those businesses undergoing a longer development phase, such as startups.
However, the extension would only apply to deficits incurred after 2020. Previous losses can only be offset within a seven-year period. Several SME Forum members regret that the option to carry forward losses is not unlimited, as is the case in neighbouring EU countries. They also highlight that the systems in place in France and Germany allow for the annual deduction of the entirety of income up to 1 million euros and beyond, up to 50% and 60% of income, respectively.
Last modification 01.11.2023
