What happens in the case of negative income from services?
If you incur negative income from services, losses can be offset against profits from similar income in the same year. A clear profit-making intention is required. Otherwise, the losses are not deductible – but the income is also not taxable.
Loss offsetting: carryback and carryforward
Loss carryback
- Losses can be offset against profits from the previous year.
- This retroactively reduces taxable income.
Loss carryforward
- Alternatively, they can be offset against profits in subsequent years.
- This reduces future taxable income.
New regulations from 2024 (Growth Opportunities Act)
Since 01.01.2024, the following maximum amounts apply:
- Loss carryback: up to one million euros (individuals), two million euros (married couples)
- Loss carryforward: up to one million euros or two million euros fully deductible
- Amounts exceeding this:
- 2024–2027: Deductible up to 70 per cent of income
- From 2028: Only 60 per cent deductible
Legal basis: § 10d para. 2 EStG, amended by the Growth Opportunities Act of 27.03.2024
Limited options since 2022
Since 2022, only a full waiver of the loss carryback is possible. A partial carryback is no longer permitted.
Conclusion
Negative income from services can still be used for tax purposes – through carryback or carryforward. From 2024, the following apply:
- Carryback: up to one million euros or two million euros (married couples)
- Carryforward: fully deductible up to these amounts, above that 70 per cent (from 2028 again 60 per cent)
