Termination of agricultural activity
If you stop running an agricultural activity, you will no longer be entitled to a deduction for expenses related to the business.
Does this apply to me?
Specific information if you have
- terminated the activity
- reduced the activity
- sold the farm
- transferred the farm (generational change)
- terminated the activity and started renting out the farm
Determine whether the agricultural activity has been terminated
You must determine yourself whether the agricultural activity has been terminated.
Often, the sale of animals and the cessation of production of agricultural products will indicate that the business has been terminated. The same applies if you sell or transfer the farm to others. If you gradually scale down the activity, the agricultural activity will often end after the de-escalation.
A business is not considered terminated while it’s being wound up.
Fixed assets
You do not need to make a settlement for your assets before you sell them or withdraw them for private use.
If you sell fixed assets in the year of cessation, the gain or loss must be entered in the business information.
In later years, the gain or loss must be entered in the tax return.
If you have fixed assets that are transferred from commercial activity to private use, the value of the fixed asset must be entered as income in the business information.
Deductions
When the business has been terminated, you will no longer be entitled to deductions for operating expenses, maintenance, etc.
You are also not entitled to a deduction for depreciations on assets for use in the enterprise (fixed assets) when the activity has been terminated. This applies from and including the year in which you terminate the activity.
Specific information if you
Subsidies and bonuses are taxable in the year they are paid, not the year they are earned.
If you have received a production subsidy, this can be included in the income in the year you terminate the activity, even if the subsidy was paid the following year. The production subsidy must then be included in the basis for calculating personal income in the year in which it’s recognised as income.