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Traders on the Frankfurt Stock Exchange (January 2021): Are equity investors taxed at a disadvantage?
Photo:
Arne Dedert / dpa
The Federal Constitutional Court has to deal with a partial aspect of share taxation in Germany: The Federal Fiscal Court (BDH) has submitted a dispute to the Karlsruhe judges because it considers the current regulation on offsetting share losses to be incompatible with the constitution.
This is about a regulation that is annoying even for many small shareholders: whoever sells shares at a loss can only offset this loss to a very limited extent, namely against profits from other share sales.
Offsetting against other capital income, for example from funds on which the usual 25 percent tax is payable, is not possible.
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In specific individual cases, the amount involved is rather modest, but the Federal Fiscal Court considers the question behind it to be fundamentally important.
The plaintiffs in the case are two spouses from Schleswig-Holstein who wanted to set off a loss of EUR 4819 from a share sale in 2012 with almost EUR 3400 of other investment income.
Both the tax office and the Schleswig-Holstein tax court in the first instance had refused.
However, the BFH considers this limitation of the set-off options to be an unconstitutional violation of the principle of equality.
In the opinion of the highest German tax court, there is no reason to treat taxpayers differently when offsetting losses from financial transactions, depending on whether the losses are incurred in share transactions or other investments.
fdi / dpa
