Comparison of business assets
What is a business assets comparison?
The business assets comparison is a method of determining profit. This is carried out by comparing assets, specifically by calculating the difference between the business assets at the end of the financial year and those at the end of the previous financial year. Withdrawals must not reduce the difference, and contributions must not increase the difference, as only business-related increases and decreases in value are taken into account in the asset comparison. Tax law recognises two variants of the business assets comparison: the unrestricted and the restricted business assets comparison. The restricted business assets comparison is a purely tax-based method of determining profit in accordance with the general principles of proper accounting. The unrestricted business assets comparison, by contrast, is based on the UGB balance sheet, which is why company law accounting regulations also apply to the determination of taxable profit, unless tax law expressly stipulates otherwise. For taxpayers subject to company law accounting requirements (in particular traders with turnover exceeding EUR 700,000, as well as corporations in general), the comparison of business assets is therefore carried out in accordance with the principles of proper accounting under company law.
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