Income from capital assets (Germany)
In Germany, income from capital assets is one of the seven types of income mentioned in Section 2 (1 ) EStG and counts as excess income . The legal basis for income from capital assets is § 20 EStG .
In addition to natural persons, certain corporations (e.g. registered associations ) can also generate income from capital assets (but this does not apply in particular to corporations, which can only generate commercial income). This income is classified as income from capital assets i. S. d. Calculate Income Tax Act. However, for tax exemptions (e.g. box dividends) and for the tax rate, only the corporate income tax law applies; the following statements on the separate tax rate are therefore not applicable to corporations.
term
In terms of type, income from capital assets includes all payments from the transfer of use of ( money ) capital , i.e. the fruits of the use of capital. It does not depend on the designation of the usage fees , but solely on their economic content as consideration for the use of external money.
General
| basic calculation of income from 2009 |
|---|
| (Gross) income (without any deduction) |
| - Saver lump sum |
| = Income from capital assets |
With the Corporate Tax Reform Act 2008 , the taxation of capital income was fundamentally reformed. An important point was the introduction of a separate tax rate for income from capital assets according to § 32d EStG. Due to its proportional structure and independence from other income, this enabled the introduction of a final withholding tax .
These changes meant a change in the system from synthetic income tax (all types of income are taxed at the same tax rate) to dual income tax ( earned income and capital income are subject to different tax rates). The resulting restriction on the deduction of income-related expenses means a departure from the net principle .
The compensation effect means that the corresponding capital income no longer has to be included in the assessment . They therefore do not appear in the income tax statistics.
Inflow of income
Income from capital assets is taxable in the year in which it accrued. Income is accrued if the taxpayer can dispose of it, e.g. B. if they have been credited to the account - see inflow principle .
Volume of income from capital assets
Bases according to § 20 EStG
The income from capital assets is finally listed in Section 20 (1), (2) and (3) EStG. If this type of income is included in income from agriculture and forestry, from commercial operations, from self-employed work or from renting and leasing, it is to be assigned to this income ( principle of subsidiarity in Section 20 (8) EStG).
A more detailed description of the extent of this income can be found in the BMF letter of December 22, 2009.
In compliance with the principle of subsidiarity, this includes the following income:
- Income from the use of monetary capital according to Section 20 (1) EStG:
- Income from dividends and comparable income ( Section 20 (1) No. 1, 2 and 9 EStG),
- Income as a (typical) silent partner ( Section 20 (1) No. 4 EStG), atypical silent partners achieve profit income (e.g. from commercial operations)
- Income from participatory loans ( Section 20 (1) No. 4 EStG),
- Income from interest and comparable income ( Section 20 (1) No. 5 and 7 EStG),
- Share of income from insurance benefits, provided they cannot be allocated to other income; Certain insurances are only subject to half of the income ( Section 20 (1) No. 6 EStG),
- Income from the discounting of bills of exchange ( Section 20 (1) No. 8 EStG),
- Income from services provided by a company of a commercial nature from legal entities under public law ( Section 20 (1) No. 10 EStG), (see also explanations on the reduced tax rate for capital gains tax )
- Income from the writing of options ( Section 20 (1) No. 11 EStG),
- Services from sales transactions and forward transactions according to Section 20 (2) EStG:
- Profits from the sale of shares in a corporation (in particular GmbH shares, shares, cooperative shares) and comparable income ( Section 20 (2) No. 1, 2 a) and 8 EStG),
- Profits from the sale of interest coupons and other interest-bearing securities and comparable income ( Section 20 (2) No. 2b, 5 and 7 EStG),
- Profits from forward transactions and comparable income ( Section 20 (2) No. 3 EStG),
- Profits from the sale of (typical) silent partnerships and participation loans ( Section 20 (2) No. 4 EStG),
- Profits from the sale of insurance contracts that also generate income from capital assets when paid out ( Section 20 (2) No. 6 EStG),
- In addition, income from capital assets also includes special fees and benefits if they are generated in connection with the above-mentioned income (e.g. compensation for damages and goodwill reimbursements in connection with certain investments) ( Section 20 (3) EStG).
Hints
- Disposals of shares in corporations with a participation in private assets of at least 1% are not included in income from capital assets ( Section 17 EStG). Nonetheless, dividend income from such investments continues to be included in income from capital assets.
- Gains and losses from foreign currency transactions do not belong to income from capital assets - unless they are abstract forward exchange transactions (without actual delivery), but (subject to the principle of subsidiarity) to other private sales transactions , provided they have been carried out within the one-year speculation period (see abovementioned BMF letter, paragraphs 38, 39).
- The distinction between a silent partnership and a profit-sharing loan has virtually no meaning for the taxation of income from capital assets in Germany, as taxation is brought about for both the silent partner and the profit-sharing loan via Section 20 (1) No. 4 EStG. However, the distinction is important for treatment under double taxation treaties .
Advertising expenses
In principle, the saver flat -rate amount of max. 801 € (max. 1602 € for married couples); in this respect, the deduction of the actual advertising expenses is excluded ( Section 20 (9) EStG). Unless the separate tax rate of 25% applies, only the actual income-related costs (e.g. counter-financing costs) can generally be claimed. This is advantageous if the actual advertising costs are above the lump sum.
losses
Losses can i. d. Usually not offset against other income or deducted from such income in other assessment periods ( Section 20 (6) EStG). However, if there is positive income from capital assets, they can be deducted from the following assessment periods. Losses from the sale of shares in corporations can even only be deducted if such income is positive.
Similar to income-related expenses, however, this principle can be suspended for certain capital income, whereby the prerequisite is always the application of the (normal) collective tax.
Foreign capital income
For persons with unlimited tax liability , corresponding foreign income also belongs to the income from capital assets ( Section 34d No. 6 EStG). To what extent they are then actually taxed and / or to what extent foreign taxes are taken into account, results from the corresponding double taxation agreements . If this is not the case, the unilateral regulations to prevent double taxation apply (cf. § 34c EStG).
Tax rate
In addition to the normal collectively agreed tax, the separate tax rate for income from capital assets according to § 32d EStG amounting to 25% for certain types of income from capital assets has been introduced since 2009. Due to its constant level, which is independent of other income, this enables the introduction of a final withholding tax.
Advantages and disadvantages of the special tariff
Savers with middle and higher incomes, who primarily generate interest income, usually have advantages with the new proportional tax rate . This is because this tax rate is 25%, while the top tax rate for the progressive income tax rate is 45%. For savers with a lower income, according to Section 32d (6) EStG, there is a right to choose (cheaper test) to apply the previous regulation, so that they too have no disadvantage through the introduction of the special tariff.
What is new is the exclusive taxation of capital gains. This makes equity and fund investments , which are usually more likely to be attributed to asset accumulation , less attractive . However, this only applies to new investments from January 1, 2009: All securities that were bought up to December 31, 2008 are subject to the old regulation and capital gains are not taxable if they are sold after twelve months. Capital gains on certificates are taxable for acquisitions since March 14, 2007, regardless of the period of ownership, provided the securities are sold after June 30, 2009.
Comparison of the taxation of dividends before and after the introduction of the special tariff
Case A: Executive officer
Executive employee with more than 1% stake in the distributing corporation employing him, therefore from 2009 the right to choose according to § 32d Paragraph 2 No. 3, chooses partial income method , 42% income tax
| 2007 | 2008 | 2009 | |
|---|---|---|---|
| Profit corporation before income taxes | € 100.00 | € 100.00 | € 100.00 |
| - Trade tax around 14% / 20% | € 20.00 | € 14.00 | € 14.00 |
| - corporation tax 15% / 25% | € 25.00 | 15.00 € | 15.00 € |
| - Solidarity surcharge on corporation tax 5.5% | € 1.38 | € 0.83 | € 0.83 |
| = Cash dividend (KESt not taken into account *) | € 53.62 | € 70.17 | € 70.17 |
| Assessment base 60% (50%) | € 26.81 | € 35.09 | € 42.10 |
| - income tax 42% | € 11.26 | € 14.74 | € 17.68 |
| - Solidarity surcharge on income tax 5.5% | € 0.62 | € 0.81 | € 0.97 |
| = remain after taxes (net dividend) | € 41.74 | € 54.62 | € 51.52 |
| Change in net dividends since 2007 | - | + 30.9% | + 23.4% |
| Change in income tax since 2007 | - | + 30.9% | + 57.0% |
| Change in corporate taxes * since 2007. | - | -35.7% | -35.7% |
* Corporate taxes are trade tax, corporation tax and solidarity surcharge.
Case B: Low wage earners
Low-wage earners and small shareholders with a stake of less than 1%. 2007, 2008 and 2009 15% marginal tax rate for income tax, therefore not affected by the special tariff due to the cheaper test, as this is higher.
| 2007 | 2008 | 2009 | |
|---|---|---|---|
| Profit corporation before income taxes | € 100.00 | € 100.00 | € 100.00 |
| - Trade tax around 14% / 20% | € 20.00 | € 14.00 | € 14.00 |
| - corporation tax 15% / 25% | € 25.00 | 15.00 € | 15.00 € |
| - Solidarity surcharge on corporation tax 5.5% | € 1.38 | € 0.83 | € 0.83 |
| = Cash dividend (KESt not taken into account *) | € 53.62 | € 70.17 | € 70.17 |
| Assessment base 100% (50%) | € 26.81 | € 35.09 | € 70.17 |
| - income tax 15% | € 4.02 | € 5.26 | € 10.53 |
| - Solidarity surcharge on income tax 5.5% | € 0.22 | € 0.29 | € 0.58 |
| = remain after taxes (net dividend) | € 49.38 | € 64.62 | € 59.06 |
| Change in net dividends since 2007 | - | + 30.9% | + 19.6% |
| Change in income tax since 2007 | - | + 30.8% | + 161.9% |
| Change in corporate taxes * since 2007. | - | -35.7% | -35.7% |
Result: Despite the introduction of the special tariff, due to the changes in corporate taxes since 2007, the net dividend has increased for both low-wage earners and (to a somewhat greater extent) for executives with a significant stake in the company that employs them.
criticism
Various aspects of the special tariff are the subject of scientific and political debate:
Tax progression
The new tax rate is much lower than the top tax rate. The beneficiaries are investors whose marginal tax rate for other income is equal to or higher than this tax rate. Critics see this as affecting the principle of taxation based on performance ( performance principle ). Previously, interest income of € 10,000 was taxable at the top tax rate of up to 45% (including so-called "wealthy tax"), but from 2009 the tax rate will only be 25% (plus solidarity surcharge and, if applicable, church tax). This regulation relieves income from capital assets by around 40%. On the other hand, in the case of income from dividends, the tax base doubles in many cases due to the elimination of the half / partial income method (previously 50% or 60%, today 100%).
Equal treatment of different types of income
With the special tariff, income from investments is treated preferentially over other types of income (see dual income tax ). In the opinion of the proponents, however, there are good reasons for this: Part of the return on investment is merely a compensation for inflation and does not lead to an increase in the efficiency of the taxpayer. For this reason, this part of the investment income must be made tax -free. With the special tariff, this is done at least partially for investors whose marginal tax rate is higher than the tax rate of the special tariff (inflation compensation for people with high incomes).
Funding neutrality
The special tariff puts equity financing at a disadvantage compared to debt financing. While interest on borrowed capital can be deducted from tax in the company and is therefore only charged to the investor with the tax rate of the special tariff, the taxation of equity is carried out by the company (via corporation tax ) and again for the investor via income tax. While this double taxation was previously avoided via the crediting procedure or reduced via the half-income procedure , taxation with income tax leads to a double burden. This creates an incentive to distribute the company's profits through interest instead of showing them as profit. However, this is not possible for shareholders who hold more than 10% in a corporation, here taxation is based on the personal income tax rate.
tax rate
In the opinion of critics, the high tax rate in Germany (see comparison table), which is high compared to other European countries, promotes capital flight .
Abolition of the "house bank principle"
According to Section 32d (2) EStG, the special tariff does not apply, among other things, if a third party owes the investment income who in turn has transferred capital to a business of the creditor (so-called back-to-back financing ). This regulation is feared that the "house bank principle" will be abolished: So far, many entrepreneurs have maintained both business and private accounts with a bank. The abovementioned rule of abuse means that private capital income is not subject to the special tariff, as long as the bank (as often) can use the private accounts of the entrepreneur for business loans. Thus, the regulation inadvertently means that business owners have to look for a new bank for their private investments.
With the Annual Tax Act 2008, before the introduction of the special tariff 2009, changes were introduced that are intended to remedy this problem: According to this, an entrepreneur can also benefit from the special tariff on his private investments at his house bank if there is no connection between the investment and the granting of a loan. Such a connection is presumed with a close chronological sequence or linkage of the interest rates.
Collecting the tax
In addition to the collection through an annual assessment, income from capital assets is collected in the form of a withholding tax, the so-called capital gains tax, which can have a final effect under certain conditions.
As of 2009
| Calculation of income up to and including 2008 |
|---|
| (Gross) income (without any deduction) |
| - Savers allowance |
| - advertising expenses |
| = Income from capital assets |
Income from capital assets must be declared in the tax return if the sum of the income exceeds the savings allowance (Section 20 (4) EStG old version) € 750.00 (€ 1500.00 for married people).
Income from capital assets includes a.
- Profit shares ( dividends ), yields and other payments from shares , profit participation rights , with which the right to the profit and liquidation proceeds of a corporation is connected, from shares in a limited liability company , in acquisition and business cooperatives and in mining associations which the rights of a legal person. For tax treatment see half-income procedure .
- Income from participation in a trade as a silent partner and from profit participation loans .
- Interest on mortgages and land charges .
- Annuities from pension debt .
- In the case of life insurance policies taken out after December 31, 2004, the difference between the insurance benefit and the sum of the contributions paid on it; with a term of at least twelve years and an age at the time of the benefit of at least 60 years, half of this amount
- In the case of life insurance policies that were taken out before January 1, 2005 and that have a term of less than 12 years or for which a contribution period of less than 5 years has been agreed, the accounting and non-accounting interest (life insurance policies before 2005 with a contribution period of at least 5 years and a minimum term of 12 years enjoy with the Retirement income tilted tax privilege for life insurance and the investment income from them is tax free)
- Income from other capital claims of any kind, if the repayment of the capital assets or a payment for the use of the capital assets has been promised or granted.
literature
- Wolfgang Zenthöfer, Dieter Schulze to Wiesche: Income tax (blue series). 10th edition. Schäffer-Poeschel Verlag , 2009, ISBN 978-3-7910-2826-2 .
Individual evidence
- ↑ cf. Gemmel / Hoffmann-Fölkersamb, NWB subject 3, p. 14695 ff.
