Verlustausgleich

Verlustausgleich is a tax law concept describing the offsetting of realized losses against profits to reduce the tax base of a taxpayer. It applies to natural persons and legal entities and covers several income categories, such as business income, self-employment, farming, rental income, and capital income. The general aim is to reflect overall economic performance by allowing negative results in one area to balance positive results in another within the same taxpayer.

There are several forms of loss offset. A current-year offset allows losses to be offset against profits in the same tax period. If losses exceed profits, the remaining amount may be carried forward to offset against future profits (Verlustvortrag). In some tax regimes there is also the option to carry back losses to a previous year (Verlustrücktrag), though this is less common and subject to limits.

Cross-category offsets are often restricted: losses in one income category may be limited in their ability to offset profits in another category, with rules varying by jurisdiction. Taxpayers typically file schedules detailing losses and gains, and enforcement rules exist to prevent abuse and ensure proper application of the offsets.

If there are no profits to offset in a given year, the losses remain available to offset future gains and may accumulate until used up. Related concepts include Verlustvortrag (loss carryforward), Verlustrücktrag (loss carryback), and Verlustabzug (offsetting under certain regimes).