tapsføring

Tapsføring is the practice of carrying financial losses forward to offset future profits, primarily for tax purposes, with the aim of reducing future tax payments. The term is used in several Nordic languages and is commonly referred to in English as loss carryforward or net operating loss carryforward.

In taxation, a loss incurred in one year can be used to reduce taxable income in subsequent years. This mechanism helps businesses weather temporary downturns and maintain continuity after setbacks. Rules governing tapsføring vary by jurisdiction, including which types of income can be offset, the maximum amount that can be carried forward, and any annual limits on offsetting.

Tapsføring is distinct from loss carryback, where a loss from a given year is applied to previous tax years to recover taxes already paid. Many tax systems restrict or exclude carryback, making carryforward the primary form of tax relief after a loss. The availability and duration of tapsføring can depend on the nature of the taxpayer (individual, corporation, or partnership) and on sector-specific provisions.

Accounting treatment differs from tax treatment. In financial reporting, an expected benefit from future tax reductions due to loss carryforwards can create a deferred tax asset on the balance sheet, recognized if recovery is probable. If recovery is not considered probable, the tax benefit may be disclosed but not recognized.

Practical implications include tax planning, corporate valuation, and risk assessment in mergers and acquisitions. Tapsføring can affect decisions on profitability targets, investment timing, and capital structure, as it changes expected after-tax cash flows.

See also: net operating loss, tax loss carryforward, deferred tax asset.