The new German derivatives trading tax law

gaussian said:
I was going to say this doesn’t make any sense but you can only write down so much loss every year in America. But over here you get a carry over so it’s not so bad.

It sounds like Germany did the German thing and complicate something easy.
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In the US if you if you enter an options spread and make 1 million on your long side and lose $950,000 on your short side, you would have a net of $50,000 profit. It sounds like under the German law, they would only allow a $20,000 loss offset so they would tax you as though you made $980,000. Is that correct?
 
FSU said:
In the US if you if you enter an options spread and make 1 million on your long side and lose $950,000 on your short side, you would have a net of $50,000 profit. It sounds like under the German law, they would only allow a $20,000 loss offset so they would tax you as though you made $980,000. Is that correct?
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If that’s true it’s insane...
 
FSU said:
In the US if you if you enter an options spread and make 1 million on your long side and lose $950,000 on your short side, you would have a net of $50,000 profit. It sounds like under the German law, they would only allow a $20,000 loss offset so they would tax you as though you made $980,000. Is that correct?
More...

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.
 
gaussian said:
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.
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No wonder they hyper-inflated under the Weimar Republic. Fucking morons.

 
You could check if there is a different tax system for "professionals" and how to become what the German tax system consider professional, regarding financial trading.
It would be very unproductive for Germany to become the most uncompetitive financial place inside Europe.
 
TIL Apparently even if you move now before the 183 days and won't have a tax residency in Germany for the year, you're still liable for taxation of the capital gains (or losses) you made while living in Germany. AND moreover the income you earn after leaving will be counted in as German income and will raise your tax bracket for the income you earned in Germany.

https://www.haufe.de/finance/haufe-...hrend-des-jahres_idesk_PI20354_HI7334126.html
 
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Fonz said:
You could check if there is a different tax system for "professionals" and how to become what the German tax system consider professional, regarding financial trading.
It would be very unproductive for Germany to become the most uncompetitive financial place inside Europe.
More...

You can set up a company and trade that way, but it comes with complexity, higher taxes, and fees. As a trader you can't deduct much, as you wouldn't be able to justify almost any expenses.
 
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