The new German derivatives trading tax law

[xandman]

Wow after digging around it seems you're right. It's even worse than I thought. I had thought it would be something like deducting a maximum of 20k of your losses against your profits, so you'd book 30k in taxable income in your example.

In reality it's actually worse. You're actually double taxed. You're taxed once on your profits, and then the 20k is deducted against the carry forward on your long side.


Holy shit.

It is asinine under a US tax law interpretation. I'd like to hear someone says he knows German tax law well to indicate it is. As I have no skin in the game, I'll take it at face value.

Otherwise, our best guess is that something is lost in the translation (or application). This would murder the market and should have been apparent in volumes traded.

 

[Overnight]

It is asinine under a US tax law interpretation. I'd like to hear someone says he knows German tax law well to indicate it is. As I have no skin in the game, I'll take it at face value.

Otherwise, our best guess is that something is lost in the translation (or application). This would murder the market and should have been apparent in volumes traded.

^^^^^^^ This

 

[anon9812]

It is asinine under a US tax law interpretation. I'd like to hear someone says he knows German tax law well to indicate it is. As I have no skin in the game, I'll take it at face value.

Otherwise, our best guess is that something is lost in the translation (or application). This would murder the market and should have been apparent in volumes traded.

It's true. There are many articles talking about it. People are absolutely shocked, it will kill the retail derivatives market in Germany.

But those who are shocked are a tiny fraction of the German population. Germans do not invest, and definitely don't trade, and absolutely not derivatives. A typical German just keeps money in a savings account. So it's not a big issue in the country.

 

[Sig]

It's true. There are many articles talking about it. People are absolutely shocked, it will kill the retail derivatives market in Germany.

But those who are shocked are a tiny fraction of the German population. Germans do not invest, and definitely don't trade, and absolutely not derivatives. A typical German just keeps money in a savings account. So it's not a big issue in the country.

This exactly. My first question was how many people will this really impact, a few hundred? What percentage of the derivatives market do they comprise, a fraction of a percent? Like the alcoholic who thinks everyone drinks because they spend all their time in bars, we tend to forget that retail traders are a completely insignificant minority when it comes to policy considerations because we're here surrounded by the only other people in the world who care about this as much as we do.

 

[Atikon]

Has anything changed? Was it just some kind of a mistake? Or are they really serious about limiting taxation of losses only up to 20k for ALL derivatives?

The middle of the fiscal year is almost here, there's still time to leave the country ... or not.

No they are serious. Most german option traders who are serious about it either moved or opened a Ltd company in Ireland/Bulgaria etc

 

[anon9812]

No they are serious. Most german option traders who are serious about it either moved or opened a Ltd company in Ireland/Bulgaria etc

Those who opened a company abroad will soon also discover the magical world of CFC rules lol

 

[Atikon]

Those who opened a company abroad will soon also discover the magical world of CFC rules lol

The ones who did have their affairs in order for the most part, if they moved it isn't even an issue. The ones who don't : Still better than not having your long leg acknowledged. Olaf is a fucking retard

 

[Windlesham1]

I am carrying over a loss from 2020 as per UK tax laws, though I amstil paying tax for 2020-2021, which will be deducted from 2021/22 in the UK- no limit as far as I know on losses. Trading is a business like a cake shop why should ity be taxed differently? Seems crazy

 

[anon9812]

I am carrying over a loss from 2020 as per UK tax laws, though I amstil paying tax for 2020-2021, which will be deducted from 2021/22 in the UK- no limit as far as I know on losses. Trading is a business like a cake shop why should ity be taxed differently? Seems crazy

That’s exactly because trading is not being seen as a business. Only making things or providing a service is considered a business.

The EU is full of marxist lunatics. 52% of Germans dislike capitalism, Germans don’t approve of risk taking in general, having anything to do with finance and banking is generally considered distasteful, and so being a trader almost equals being a criminal or a swindler, being a trader is seen by the general population as being immoral, decadent, corrupt, reckless, profiteering, and most gravely - rich.

Olaf Scholz, the finance minister who invented this and pushed it through was a vice president of the Socialist Youth when he was younger. Allegedly in one heated debate he started yelling how much he hates capitalism. He has a history of inventing ways how to punish traders.

A few years ago they pushed through at the EU level a regulation that effectively banned anyone in the EU from buying US ETFs, Europeans are not able to buy SPY, for their protection of course, but options on SPY are fine. Sames with limiting Forex leverage to 1:30 for retail in the whole EU. In many countries if you do it as a main activity, you have an obligation to register a company, and with that pay effectively 50-60% taxes. It’s becoming increasingly impossible to trade in Europe as a retail trader.

 

[Sig]

That’s exactly because trading is not being seen as a business. Only making things or providing a service is considered a business.

The EU is full of marxist lunatics. 52% of Germans dislike capitalism, Germans don’t approve of risk taking in general, having anything to do with finance and banking is generally considered distasteful, and so being a trader almost equals being a criminal or a swindler, being a trader is seen by the general population as being immoral, decadent, corrupt, reckless, profiteering, and most gravely - rich.

Olaf Scholz, the finance minister who invented this and pushed it through was a vice president of the Socialist Youth when he was younger. Allegedly in one heated debate he started yelling how much he hates capitalism. He has a history of inventing ways how to punish traders.

A few years ago they pushed through at the EU level a regulation that effectively banned anyone in the EU from buying US ETFs, Europeans are not able to buy SPY, for their protection of course, but options on SPY are fine. Sames with limiting Forex leverage to 1:30 for retail in the whole EU. In many countries if you do it as a main activity, you have an obligation to register a company, and with that pay effectively 50-60% taxes. It’s becoming increasingly impossible to trade in Europe as a retail trader.

We can't trade most European ETFs and options as U.S. citizens so unfortunately no monopoly on that bit of stupidity. Fortunately hurts us less.