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BFH in Munich:
The judges have doubts about the constitutionality of share taxation
Photo: DPA
The Federal Fiscal Court (BFH) considers the tax deduction options for losses from share transactions to be unconstitutional. The highest German court for tax matters is submitting the problem to the Federal Constitutional Court for decision, as it announced on Friday. Specifically, since 2008, investors have only been able to deduct their losses from the sale of shares from their profits from the sale of other shares, but not from profits from other investments. As a result, taxpayers would be treated differently without justification, the BFH criticized.
An investor who had only made losses from the sale of shares and wanted to offset these against other capital income in the tax return - which the law does not allow - had sued.
Should the plaintiff be right with his lawsuit in the last instance, thousands of stock investors would have the chance of a tax refund.
In detail, this concerns a regulation that is annoying for many private investors: whoever sells shares at a loss can only offset this loss to a very limited extent, and only with 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.
In the present individual case, 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.
But the Federal Fiscal Court considers this limitation of the set-off options to be an unconstitutional violation of the principle of equality.
In the opinion of the Federal Fiscal Court, there is no reason to treat taxpayers differently when offsetting losses from monetary transactions - depending on whether the losses are incurred in share transactions or other investments.
cr / Reuters
