Tax revenue effects of abolishing the profit and loss transfer agreement as a prerequisite for an ‘Organschaft’ for income tax purposes

Project director

  • Prof. Dr. Andreas Oestreicher

Participating research assistants

  • Dr. Reinald Koch
  • Dipl. Kffr. Dorothea Vorndamme
  • Dipl. Wiinf. Stefan Hohls


1.10.2011 – 31.05.2012

Funded by

  • Institut Finanzen und Steuern e.V.


During the current legislative period, the German regulations on group taxation have again come under discussion. Besides the fact that they are limited to domestic tax groups, the requirement of an existing profit and loss transfer agreement and the complexity of the legal regulations are particularly subject to criticism. According to the coalition agreement of the CDU/CSU and FDP, the implementation of a modern group taxation regime in place of the current regulations regarding group taxation had to be reexamined. A condition for a possible reform was that it would protect tax revenue at its existing level (revenue neutrality).
At the request of the Federal Ministry of Finance, the working group “Loss off-set and group taxation” examined three proposals for the reform of group taxation (“IFSt-model“, “revenue attribution model“ and “group contribution model“). A first evaluation resulted in the outcome that none of the three models for group taxation would meet the condition for revenue neutrality when replacing the current system. In this context, the working group came to the conclusion that the IFSt-model, in particular, would lead to a reduction in annual tax revenues amounting to high single-digit billions of euros.

To examine whether, and if so to what extent, the revenue estimate of this working group represents a credible outcome (against the background of certain elements of the IFSt-model leading to increased tax revenue), the IFSt-model proposal was considered in the context of our research project. To estimate revenue consequences of the IFSt-model, the micro-simulation model “ASSERT“, developed by the tax division of the Faculty of Economics of Göttingen University, was employed.


Oestreicher, A./Koch, R./Vorndamme, D./Hohls, S., Aufkommenswirkungen einer Abschaffung des Ergebnisabführungsvertrags bei der ertragsteuerlichen Organschaft (tax revenue effects of abolishing the profit and loss transfer agreement as a prerequisite for an “Organschaft“ for income tax purpose), IFSt-Schrift Nr. 482, Berlin 2012. The publication can be accessed here.