Fund taxation in 2018 and "fiktive Veräußerung"

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I contacted flatex support (that will answer in German...) and I am trying to google with googletranslate helping me but it would be great if I can have an answer here.

In 2018 taxation rules for fund changed. I knew it. But i did not know about this fiktive Veräußerung and so I am trying to understand if my broker basically sold and bought again without triggering the capital gain taxes payment ...or yes ? What it is happening actually ? Expecially from a tax point of view, what happens and should I do some actions ? My broker manage automatically the tax part, so automatically capita gains are payed to the Finanzamt. Does this fiktive operations change something ?

 

I discovered this looking at my Depotbestand and I saw that the "kauf" costs did not match with the one i have on my excel sheet where i track all operations...they were too much near the current value of funds although i bouth them few months ago.

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For the new way that funds get taxed, they need the value of that fund on 1.1.2018, so for all funds they did a fictive "sale" (= fiktive Veräußerung) on 31. December 2017, and a fictive "buy them back" on 1. January 2018.

These "sales" and "buiyngs-back" are only in their heads, so nothing to worry about.

 

Details in: https://www.test.de/Fondsbesteuerung-ab-2018-Das-muessen-Sie-ueber-die-Fondssteuer-wissen-5124267-0/

 

******************************************************

 

If you had some funds that you bought in 2008 or earlier, there is some extra bad news.

Back then, they promised that no matter when in the future you sell these "old" pre-2009 funds, the profit you make from the sale will be tax-free.

So many people quickly bought some funds before the 31.12.2018 deadline, thinking they would keep them as a long-term investment.

 

Now, they went back on their word.

All rises in the fund value (= Kursgewinne) that happened until 31.12.2017 are still tax-free, which is why a "fiktive Veräußerung" = "fictive sale" appears in your Depot, so that they know the value on 31. December 2017.

Then they do a fictive "buying-back" of these funds on 1. January 2018.

 

If you then sell these "old" pre-2009 funds sometime in the future, they give you a special tax-free allowance of 100,000€ for the rises in fund value (= Kursgewinne) that were generated between 1.1.2018 and the date you sold.

 

You can read up on this here: http://www.dasinvestment.com/investmentsteuerreform-so-lassen-sich-100000-euro-freibetrag-optimal-nutzen/

 

Example:

You bought funds in 2008 at 100,000€

These funds were worth 240,000€ on 31. December 2017

--> the "profit" up till 31.12.2017 of 140,000€ (= 240,000€ - 100,000€) is tax-free.

 

They now take note of the value on 31.12.2017, those 240,000€.

 

If you now sell the funds, e.g. in 2027, and get 360,000€ for them, then you will have to tax:

selling_price - value_on_31.12.2017 - special_tax_free_amount

= 360,000€ - 240,000€ - 100,000€

= 20,000€ 

with whatever the tax rate may be in 2027 (at the moment, the tax rate is 26.375% = 25% Abgeltungsteuer + 5.5%*25% = 1.375% Solidaritätszuschlag).

 

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I bough funds between august and october 2017.

If I understood well, the gain I made till 31.12.2017 will not be taxed (if I stay under the 100k allowance) as it happens for the pre-2009 funds, right ?

 

By the way, I want to really thank you @PandaMunich for the valuable help you regularly provide here in Toytown Germany. Without detracting from the rest of participants to this forum, I think you are a real asset here in TT. 

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18 hours ago, Frantic said:

If I understood well, the gain I made till 31.12.2017 will not be taxed (if I stay under the 100k allowance) as it happens for the pre-2009 funds, right ?

 

No, sorry, you didn't understand.

The profit up to 31.12.2017 being tax-free and any profit after 31.12.2017 being tax-free up to 100,000€ only applies to pre-2009 funds, i.e. funds that you bought before 2009.

 

Example:

You bought funds in 2008 at 100,000€

These funds were worth 240,000€ on 31. December 2017

--> the "profit" up till 31.12.2017 of 140,000€ (= 240,000€ - 100,000€) is tax-free.

 

They now take note of the value on 31.12.2017, those 240,000€.

 

If you now sell the funds, e.g. in 2027, and get 360,000€ for them, then you will have to tax:

selling_price - value_on_31.12.2017 - special_tax_free_amount

= 360,000€ - 240,000€ - 100,000€

= 20,000€ 

with whatever the tax rate may be in 2027 (at the moment, the tax rate is 26.375% = 25% Abgeltungsteuer + 5.5%*25% = 1.375% Solidaritätszuschlag).

 

18 hours ago, Frantic said:

I bought funds between August and October 2017.

 

For 2017, you paid 26.375% Abgeltungsteuer+Soli on 100% of all your dividends that were paid out in 2017, no matter whether they were paid out to you or accumulated/reinvested into the fund (= thesauriert).

 

You also paid 26.375% Abgeltungsteuer+Soli on any profit you had if you sold in 2017 post-2008 funds, i.e. if you sold in 2017 funds that you had bought on 1.1.2009 or later.

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One can be forgiven for thinking that parliament (the ominous Gesetzgeber) really wants to disuade people from investing for their future by making things as complex as possible.  Seems they prefer people to spend-as-they-earn & in old age fall on social security...

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Or you could simply buy shares/stock instead of funds and avoid all the above mind-boggling calculations :D

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The (main) reason to buy funds is to spread the risk & (in most cases) have a fund manager to watch over the contents.

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When I bought those funds I knew about the mess related to the Dividend calculations. In order to avoid to do all calculations and make more difficult my tax declaration I just bought funds based ( Fondsdomizil ) in Germany (that fix by themsleves directly with the Finanzamt the dividend stuff). For the rest, I intentionally chose a Broker that manage for me all the tax topic (it is flatex) related to gain/loss from sales/purchase of stock and funds plus other stuff like "loss wallet" (to use as compensation in case of gains) and the 600euro (more or less) freetax thresold.

This means that I have (had ?) a limited choice in funds and also broker with expensive fees compared to not local broker like IG that offers lot smaller fees. But in this way at least I don't have to bother with tax declaration, expecially if the invested sum is not huge.

And this is the reason also why I chose to invest in funds...in order to diversify. Investing directly in Stocks by building a diversified portfolio, expecially with the high fee of german broker, needs a starting sum that I don't have :D 

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4 hours ago, Frantic said:

600euro (more or less) freetax threshold

 

Actually, the first 801€ (= Sparerfreibetrag) of your capital income are tax free. 

You have to give your bank an explicit, signed Freistellungsauftrag so that they exempt these first 801€ from 26.375% Abgeltungsteuer+Solidaritätszuschlag.

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Hi everyone,

 

I have a question regarding taxation of a foreign closed-end fund.

 

I have invested into USD denominated private equity fund (A Cayman Islands Exempted Limited Partnership), which invests in a country outside EU, in 2011. It did not do any payouts since 2014, when I still lived in that other country outside EU. So in 2017 I did not get anything, but paid a management fee. The fund recorded an unrealised capital gain on paper for 2017.

 

Do I need to declare anything for 2017? I have only been working in Germany since 2017, so did not file anything before that.

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20 hours ago, Hulie said:

The fund recorded an unrealised capital gain on paper for 2017.

 

Do I need to declare anything for 2017?


Yes, you need to declare that paper gain in Anlage KAP, line 15.

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16 minutes ago, PandaMunich said:


Yes, you need to declare that paper gain in Anlage KAP, line 15.

Thank you very much! Does it mean I will be taxed on this amount? If so, what happens if this paper gain is reversed in 2018, do I get the tax back or if I move away from Germany later and the investment goes bust? This investment is very volatile. In fact, it is still in the red from 2014 levels, 2017 gain is a recovery from previous losses - it took a 50% hit in 2015. Could I avoid paying the tax for 2017 if I show that despite the 2017 paper gain, it's actually in the loss from inception levels or from the last payout. 

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51 minutes ago, Hulie said:

If so, what happens if this paper gain is reversed in 2018, do I get the tax back ...

I believe its your tough luck - but the Finanzamt have got their cut!

 

Some years ago we were able to purchase company shares at a favourable price - of course the "geldwerter Vorteil" was taxed in DE.  Then the company shares collapsed.  Luckily I had not invested too much but lost a fair bit - but at least the FA was in plus...

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If that 2017 gain was because of not paid out dividends that were reinvested, you have to declare and tax that gain in Germany. Otherwise not.

 

From 2018, the way funds are taxed changes, see above.

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I have a query about how to calculate fund taxes for funds held in a foreign account and in foreign currency:

 

I have some index funds bought in the UK before I moved to Germany, they are held in a UK account and their value is reported in British Pounds. 

 

I assume that in this case to know the value of the funds on the 1.1.2018, and on the 31.12.2018, I will have to convert their value in Euro by using the currency exchange for the corresponding day, is this correct? and if  so, where I can find the official currency rate that the Finanzamt will accept? 

 

thanks for any advice/suggestion

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1 hour ago, SpaghettiAlDente said:

where I can find the official currency rate that the Finanzamt will accept?

 

PandaM has not been online for a few days (her supply of bamboo shoots is probably snowed in).

She would likely point you here:  http://www.bundesfinanzministerium.de/Web/DE/Themen/Steuern/Steuerarten/Umsatzsteuer/Umsatzsteuer_Umrechnungskurse/umsatzsteuer_umrechnungskurse.html

 

However, in my limited experience my FA has accepted the rate for the day as given by oanda.com.

TBH so far they have never asked where I get the exchange rates I use when reporting dividends.


You do report your dividends I hope?

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Thanks for your reply @HEM,

 

I see, so I can just use the values for January and December from the table of 2018 rather than the exchange rate on the exact day.  

 

My funds are all accumulating funds (category A in the example from PandaM above in this thread), so their value at the end of the year includes the dividends, if I understood well the new law for accumulating funds you don't need to disaggregate the dividends from the value of the fund at the end of the year.   

 

 

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Dear Toytown forum,

If someone would be able to provide advice or information on the below question, it would be great. I have a question about tax in Germany on foreign (Swedish) equity funds = Aktienfonds.

I am a Swedish citizen and have been living, working and paying taxes in Germany for the last 10 years. In the middle of 1980s while living in Sweden I put money in three Swedish Aktienfonds and in 2015 I inherited an Aktienfond in Sweden from my father. During all the years I have been paying tax in Sweden on the dividends, also since moving to Germany in 2008. The funds were never included in the German tax return but I now realize they perhaps should have been taxed in Germany rather than in Sweden.

In 2018 I sold two of the four funds so in the next Swedish tax return I will be paying 30% tax on the profits of the sale.

As I understand it, in Germany profits from the first 100000€ balance (value) from Aktienfonds are free from tax in certain circumstances.

Here is the question: Would that apply as well to foreign funds purchased with foreign money and inherited funds (as described above)?

Even if this not the case and I took up the gain in my German tax return, the tax rate in Germany is 26,375%, so I would be paying less tax than in Sweden.

Regards,

Larrit

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11 hours ago, Larrit said:

The funds were never included in the German tax return but I now realize they perhaps should have been taxed in Germany rather than in Sweden.

Here is the question: Would that apply as well to foreign funds purchased with foreign money and inherited funds (as described above)?

 

Yes, and from the German point of view, you have been practicing tax evasion if your worldwide capital income (interest, profits from selling funds/shares bought after 2008, dividends even for pre-2009 funds/shares!, ...) was above the yearly tax-free amount for capital income, this amount is called the Sparer-Pauschbetrag and is 801€ (1,602€ per married couple), in accordance with §20 (9) EStG.

 

If your worldwide capital income was below 801€ (or 1,602€ if you're married), simply write the Finanzamt a letter explaining your situation.

 

If we are talking about more than 801€ a year (or 1,602€ if you're married), you will need a Steuerberater to do a Selbstanzeige in accordance with §371 AO (see here for this section in English: §371 AO) to clear this up without also facing criminal proceedings.

But the fact that you have been paying 30% tax to Sweden, when you should have only paying 26.375%, will at least show them that you didn't do it to pay less tax.

 

Dividends:

Yes, Germany has the taxation rights on the dividends (see article 10 of the double taxation agreement between Germany and Sweden), but with Sweden being allowed to charge you 15% source tax which would reduce the German income tax of 26.375%. So 15% to Sweden, the rest of 11.375% to Germany.

These dividends have always been taxable at 26.375%, even for funds bought in 2008 or earlier.

From 2018, dividends are still taxable at 26.375%.

However, if you have a "thesaurierenden Fonds", i.e. a fund that reinvests the dividends instead of paying them out, they now do the taxation via the Vorabpauschale, i.e. 26.375% tax not based on the real re-invested dividend like before 2018, but on an "imaginary" dividend.

 

Profit from selling funds:

Germany also has the taxation rights on your profit from selling a fund, see article 13 (4) of the double taxation agreement between Germany and Sweden.

If you sell "old" funds that you bought in 2008 or earlier (or your father bought in 2008 or earlier and you then inherited, even if you inherited after 2008), then any increase in their value between the date you bought them (or your father bought them) and 31. December 2017 is not subject to income tax at all.

If you sell these "old" funds, the first 100,000€ of the profit (= value when selling, minus value on 31. December 2017) are not subject to tax.

All this is laid down in §56 (6) Invenstmentsteuergesetz: https://www.gesetze-im-internet.de/invstg_2018/__56.html

  • (6) Bei Alt-Anteilen, die vor dem 1. Januar 2009 erworben wurden und seit der Anschaffung nicht im Betriebsvermögen gehalten wurden (bestandsgeschützte Alt-Anteile), sind
    1.
    Wertveränderungen, die zwischen dem Anschaffungszeitpunkt und dem 31. Dezember 2017 eingetreten sind, steuerfrei und
    2.
    Wertveränderungen, die ab dem 1. Januar 2018 eingetreten sind, steuerpflichtig, soweit der Gewinn aus der Veräußerung von bestandsgeschützten Alt-Anteilen 100 000 Euro übersteigt.
    Der am Schluss des Veranlagungszeitraums verbleibende Freibetrag nach Satz 1 Nummer 2 ist bis zu seinem vollständigen Verbrauch jährlich gesondert festzustellen. Zuständig für die gesonderte Feststellung des verbleibenden Freibetrags ist das Finanzamt, das für die Besteuerung des Anlegers nach dem Einkommen zuständig ist. Anteile im Sinne des § 21 Absatz 2a und 2b des Investmentsteuergesetzes in der bis zum 31. Dezember 2017 geltenden Fassung sind keine bestandsgeschützten Alt-Anteile im Sinne der Sätze 1 bis 5.

 

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