Provision due to coronavirus in the 2019 financial statements - Canton Aargau adapts tax practice

Fabian Lüscher
Fabian Lüscher
Senior Manager, Steuerberatung
Provision due to coronavirus in the 2019 financial statements - Canton Aargau adapts tax practice

In accordance with a special ordinance, the Canton of Aargau wants to allow provisions due to the coronavirus to be taxed in the 2019 annual financial statements. What previously seemed impossible in tax practice will now be decreed by the Canton of Aargau.

In accordance with a special ordinance, the Canton of Aargau wants to allow provisions due to the coronavirus to be taxed in the 2019 annual financial statements. What previously seemed impossible in tax practice will now be decreed by the Canton of Aargau.

Special ordinance adopted by the Government Council of the Canton of Aargau

The §9, No. 6 of the Special Ordinance 1 for dealing with disturbances of public order and security and social emergencies caused by the coronavirus (Special Ordinance 20-1; only available in German) regulates the following:

If a company is affected by a closure ordered by the authorities as a result of the corona pandemic, or if it is proven that it is suffering a massive slump in sales, a provision can be formed in the 2019 annual financial statements. The Department of Finance and Resources (DFR) issues a directive setting out the conditions for the provision.

Pressure on other cantons increases

It can be assumed that, as a result of the decision of the cantonal government, other cantons in the canton of Aargau will reconsider and possibly adapt their practices. So far, other cantons, with the exception of the canton of Schwyz (), have remained silent on this issue.