OECD Taxation Working Papers N. 3- LOSS CARRYOVER PROVISIONS. MEASURING EFFECTS ON TAX SYMMETRY AND AUTOMATIC STABILISATION. This paper presents two tax policy indices capturing the effects of various carryover provisions on tax symmetry and stabilisation across a total of 34 OECD and non-OECD countries. The tax symmetry index captures the effectiveness of carryover provisions, including carry-forwards and carry-backs, relative to full symmetry, while the stabilisation index captures the proportion of an adverse revenue shock on loss-making firms which is absorbed by the corporate tax system. The indices incorporate country-level information on corporate tax carry-forwards and carry-backs including restrictions regarding the timing as well as the amount of tax losses which can be offset in a given fiscal period; it has been collected through a WP2 questionnaire in 2016. While group-level consolidation is not addressed, the focus of this study is intertemporal loss offsetting. The main results are as follows: · Ideally, unlimited carry-backs and carry-forwards should be provided and tax losses should be indexed to inflation to maintain their real value over time. In this case corporate taxation would be symmetric, removing tax-induced distortions towards less risky projects and increasing stabilisation effects of corporate taxation. · However, in our sample only 18 provide unlimited carry-forwards and most countries do not index tax losses to inflation; perfect tax symmetry is therefore not achieved by the majority of the included corporate tax systems. · 16 countries limit carry-forward periods to a certain amount of years; 8 countries limit the amount of tax losses which can be offset in any given year. Depending on the duration and intensity of the loss period these limitations can have different effects on the two tax indices. · Given that most countries do not index tax losses carried forward to inflation, carry-backs are an effective policy, which helps to increase tax symmetry and stabilisation. In the sample only 9 countries provide carry-backs. There can be important interactions between carryover provisions and accelerated depreciation. Since depreciation allowances are typically carried forward as part of tax losses, more acceleration implies an increase in the adverse effects of a given restriction. (Tibor Hanappi).