Over the counter
A over-the- counter business or counter business is a banking business that takes place step by step by exchanging service and consideration ( payment ) without a visible booking via a current account or securities account .
The term is explained by the usual place of execution at the bank counter , ie "over the (counter) board". Usually one of the following financial instruments is exchanged for cash in over-the-counter business :
- Sorts ( cash in foreign currency ),
- Precious metals (in the form of gold or silver coins , medals , bars ),
- Travelers checks or
- Securities as physically issued documents, i.e. blackboard papers .
If the bank customer acts as a buyer of these financial instruments, he must pay for them by paying in cash at the ask price ; if he sells them to the bank, he receives a cash payment equal to the bid price .
The similar-sounding English word ( English over-the-counter , OTC) is a general understanding that he means any OTC trading regardless of whether the traded securities as physical certificates will be handed out.
The concept of over the counter business was narrowed down to the purchase and sale of securities in the context of the debate about tax compliance . There are a few special features to be taken into account, because unlike in the case of securities and precious metals, there are taxable interest income associated with securities. Today, securities are predominantly traded by way of collective safe custody or value rights , i.e. posted to securities accounts without denominations. That is why physically deliverable securities certificates and corresponding over the counter transactions are the exception.
Securities can be legally acquired by any bank customer by way of over-the-counter business. The Federal Constitutional Court has confirmed this judgment of the Federal Fiscal Court. Accordingly, the mere ownership of blackboard papers and their posting in a securities account does not in itself constitute an initial suspicion of criminal tax proceedings . However, if there are indications of targeted anonymization, someone suspects that this type of business transaction paved the way for a subsequent tax reduction or evasion . This is particularly true if accounts and custody accounts are kept at a bank , but securities transactions are carried out there as cash transactions.
Both judgments only concern the bank customers who do over-the-counter transactions at their house bank, where they also maintain their bank accounts. Conversely, these rulings do not cover those bank customers who either have their accounts with another bank or who have no bank accounts at all. There can be rational reasons for this. If over-the-counter transactions are carried out at a bank other than the house bank, there may be reasons for fees ; if a customer has no bank accounts at all, over-the-counter transactions are the only way he can do banking.
In terms of tax law, there is an over-the-counter transaction if securities are paid out or credited against delivery and these are neither held in custody nor administered by the credit institution or are paid out or credited against delivery of the interest coupons and the bonds are not held in custody by the debtor or the domestic credit institution. Then these securities can only be taxed via the exception of EStG .Paragraph 1 No. 5d
Legal motives for self-custody: it saves the bank customer custody fees or he can give away particularly decorative securities certificates. The bank customer can also use the over-the-counter business to prevent the bank from accessing it under the terms and conditions lien . It is already illegal to conceal assets in the event of a possible compensation for the spouse's profits or to hide assets from creditors or heirs . These actions can to contesting law be challenged. Some bank customers mistakenly believe that they would have to save the acquired securities from bankruptcy by doing over the counter transactions . In the event of bankruptcy of the credit institution, the customer can take out the securities posted to his custody account at any time without loss (in technical language: separate ): see article Insolvency of the custodian .
Anonymity and banking secrecy
If the over-the-counter transactions fall below certain thresholds, the bank customer remains anonymous, as his bank accounts are not affected by cash payments and the transaction is not recorded by credit institutions. However, this anonymity of the bank customer is lifted when two threshold amounts are exceeded:
- Acceptance and delivery of cash, securities of at least 15,000 euros ( (3) No. 2 GwG) or precious metals of at least 10,000 euros ( (6) of the GwG), regardless of whether a bank account is used;
- Buying and selling varieties of more than 2,500 euros if no bank account is used; if a bank account is activated, the threshold of at least EUR 15,000 applies ( KWG ). (1)
In these cases, pursuant to GwG, there is an identification obligation vis-à-vis the credit institution by presenting the identity card or passport , from which the name, date of birth and address, insofar as they are contained, and the identification of the type, number and authority of the identity card must be recorded are.(1) of the
When crossing borders, travelers within the EU, outside the EU and back, must declare a written list of cash, securities and interest coupons due if they exceed the threshold amount of 10,000 euros.
In a further decision on the subject on August 2, 2001, the Federal Fiscal Court made it clear that banking secrecy does not have any trust or protective effect in anonymised over-the-counter transactions . The judgment concerned cases of an audit of credit institutions by the tax authorities, in which over-the-counter transactions were discovered and traced back to the bank customers. Despite the anonymized over-the-counter transactions, the discovered bank customers could not invoke banking secrecy.
As a result of the final withholding tax , over-the-counter transactions largely lose their significance for possible tax evaders. Income from capital assets has not been charged with the individual tax rate since January 2009. A tax rate of 25% applies to investment income ( (1) EStG), which means that income tax is covered. With the introduction of the final withholding tax from January 2009, when coupons are redeemed in the over-the-counter business, 25% of the income will be retained by the bank. The distinction between an interest rate withholding tax of 30% on income from securities booked in securities accounts and 35% for over-the-counter transactions no longer applies, because the new law no longer provides for a special regulation for over-the-counter transactions. The investment income with final withholding tax - including income from over-the-counter transactions - no longer has to be declared in the tax return.
In the case of self-custody, the holder must take care of interest and dividend payments , the final maturity of bonds and the redemption of subscription rights and observe the relevant deadlines . To do this, he must separate the coupons from the sheet of security and present them to the bank for cash payment . He bears the risk of theft and destruction if he does not deliver the actual pieces of the securities in a safe deposit box . In addition, if the deadline is missed, there is a risk of the claims becoming statute- barred . For personal safekeeping at home, cash and securities are also included in the household contents insurance . But here the conditions provide for maximum limits. In principle, the compensation for valuables per insured event is usually limited to 20% of the sum insured , unless higher limits have been agreed. If, for example, money or bearer papers are not kept in the safe, compensation is usually limited to 1,000 euros. The limit for savings books, certificates or other securities is usually 2,500 euros.
- shop. In: Gabler Wirtschaftslexikon. Springer Gabler, accessed June 28, 2017 .
- BFH , decision of June 15, 2001, Az.VII B 11/00, full text .
- BVerfG, decision of March 1, 2002, Az. 2 BvR 972/00, full text
- EC Regulation 1889/2005 of October 26, 2005, OJ. No. L 309
- BFH, decision of August 2, 2001, Az.VII B 290/99, full text .