ARTICLE · 20 JULY 2001

228. Clarification Of Loss Utilisation Directive

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1. Introductory

The Frankfurt Regional Tax Office has issued an administrative order dated 3 July 2000 (S 2745 A – 22 – St II 13 (S); DB 2000, 1541) clarifying the application of certain aspects of the 1999 Loss Utilisation Directive, on which we reported in article no. 176. The Loss Utilisation Directive (hereinafter: "the 1999 directive") deals with the application of § 8 (4) KStG (denying loss carryforwards to a corporation where it is not "economically identical" to the corporation that sustained the losses) and § 12 (3) UmwStG (making the survival of loss carryforwards in merger situations contingent upon the continued operation of the business that caused the loss).

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