Sale of shares during the year - Losses may be carried back
When shares in a GmbH (limited liability company) are sold, then there is usually a risk that the existing loss carryforwards will be forfeited. According to the legal provisions, these can generally no longer be offset against future profits. However, when the shares are sold during the year, a loss may be carried back.
In this regard, the Federal Fiscal Court (Bundesfinanzhof,BFH), in its ruling of 16.7.2025 (case reference: I R 1/23) provided a clarification that is of relevance to actual practice. Losses that arise in the current year up to the date of the sale may, under certain conditions, be carried back to the previous year and be offset there against the profits. Consequently, this supplements the court’s previous view. Up to now, while the focus was particularly on offsetting profits generated up to the date of the sale against old losses, now the reverse situation has also been clarified; losses incurred during the year can likewise be used for tax purposes by reducing earlier profits.
Example
At the end of the year, a GmbH has a loss carryforward of €1m. In the current year, the company is sold midway through the year. Up to this point in time, a loss arises in the amount of €300,000; in the previous year the GmbH generated a profit of €500,000. In this specific case, the loss that arose up to the date of the sale, in the amount of €300,000, may be carried back to the previous year and offset there against the profits in the amount of €500,000. Accordingly, the taxable profit for the previous year is reduced to €200,000.
In the wake of the change of shareholders, the remaining tax loss carryforward is basically forfeited and is no longer available for future years.
