Corrections outside the balance sheet in the corporate tax return

The corporate tax return starts from the result of your annual close. Sometimes the taxable income is not the same as that result: the shareholder received a benefit that counts as a hidden profit distribution, the books hold a claim that is really a contribution, or a partnership reports its income for a different period. You enter these corrections in the return itself. Do not book fake entries in the Ledger to reach the tax figure.

Most companies need no corrections. Leave the section empty if your accountant's figures match your books.

What Norman adds back by itself

Norman reads these amounts from your annual close. Do not enter them again:

• corporate income tax, solidarity surcharge and trade tax booked as expenses;
• non-deductible expenses booked on their own accounts, such as late-payment surcharges or non-deductible gifts.

1. Open the corrections

1. Open Taxes and the corporate tax return for the year.
2. Go to the Loss carryforward step.
3. Open Corrections outside the balance sheet and choose Add correction.
4. Pick the Kind of correction, enter the Amount and a Reason.
5. Save the step with Next. Norman checks each line and shows any problem next to the field.

Every line keeps its reason and you see it again in the review. Only the reason of a hidden profit distribution goes to the Finanzamt, as its description. Keep the documents behind each correction with your records.

2. Choose the right kind

Hidden profit distribution (vGA). The company gave a shareholder a benefit it would not give a stranger, for example it paid private costs. The amount is added to the income. Enter what the shareholder received as the reason, the Shareholder who received it, their tax ID (a person) or tax number and the federal state of its Finanzamt (a company), and when they received it: on one date or over a period. The Finanzamt needs all of this for each hidden profit distribution.

Contribution booked as income, not yet paid (e.g. repayment claim). The books show a claim against a shareholder as income, for example a claim to have a hidden profit distribution paid back, and the shareholder had not paid it by the end of the fiscal year. Tax law treats it as a contribution, so the amount is subtracted. If the shareholder already paid during the year, Norman cannot declare it yet: contact support before filing.

Tax balance sheet difference. The commercial balance sheet and the tax balance sheet value something differently, for example unrealised exchange gains on short-term receivables, or costs from before the company was founded. Enter the amount with a minus sign if it lowers the profit. This line changes the annual result declared in the return. Ask your tax advisor whether your E-Bilanz then needs a matching reconciliation statement.

Further non-deductible expense. An expense that tax law does not allow and that is not booked on a non-deductible account. The amount is added to the income, on top of what Norman reads from the books.

3. Enter partnership interests

If your company holds an interest in a partnership, for example as the general partner of a GmbH & Co. KG, add it under Partnership interests:

1. Enter the Name of the partnership, its Tax number and the Federal state of its Finanzamt.
2. Enter the Profit or loss of this partnership in your annual result, as booked in your books.
3. Enter the Income per the partnership's assessment (Feststellung) for the partnership's fiscal year that ends in this year.

Norman replaces the first figure with the second. When the partnership's fiscal year ends earlier, for example in November, the fees your company booked for December appear only in next year's Feststellung. Enter both figures as they are and the difference is handled for you.

The trade tax return uses the same lines: a profit share is deducted from the trade income, a loss share is added back. You enter the partnership once, in the corporate tax return.

4. Check the reconciliation

In Review and submit, the table From annual result to taxable income lists the annual result, the amounts Norman added back and each of your corrections with its reason, to the cent. Below it you see the income declared to ELSTER. ELSTER declares whole euros and rounds some lines in a fixed direction, so the declared income can differ by a euro or two from the exact total.

Example: an annual result of −1,000.00 €, income taxes booked of 600.00 €, a hidden profit distribution of 5,000.00 €, an unpaid repayment claim of 2,000.00 € and a partnership with 700.00 € in the result but 600.00 € in its Feststellung give a taxable income of 2,500.00 €.

Limits

• A hidden profit distribution also counts as a distribution for the tax contribution account and can be subject to capital gains tax. Norman does not derive either from the correction. Check both with your tax advisor.
• Corrections for a tax group (Organschaft) are not supported.
• If the return shows an error you cannot resolve, follow Prepare and submit company tax returns and do not submit until it is clear.