Potential return of billions to investors following the recent BFH court ruling?
In 2018, a significant investment tax reform was introduced, bringing about numerous changes that have simplified the taxation system for investors. This reform, which primarily implemented important EU legal requirements, was predominantly assessed positively, as it led to a harmonization of tax rules.
One of the key changes was the introduction of the advance flat rate and the unification of the taxation of income from public funds. This move aimed to streamline the system, making it more straightforward for investors to navigate. The reform also brought about a tax equalization of domestic and foreign investment funds.
The advance flat rate and the unification of the taxation of income from public funds were integral parts of the reform. With their introduction, the system became more uniform, reducing complexity for investors.
However, it's important to note that if investors have sold their fund shares in the meantime, they have no claim to a retroactive refund. Conversely, the potential refund of capital gains tax could benefit investors, as it may be passed on to the funds.
In the case of deceased investors, the heir benefits from any refund to the fund, provided the heir still holds the fund shares. The fund company must take action and apply for the refund of the incorrectly levied capital gains tax. If the fund company receives a refund, it could positively impact the value of the fund's assets.
It's worth mentioning that direct claims by investors for the refund of capital gains tax do not usually exist; the refund goes to the fund itself. The responsibility for asserting refund claims lies with the fund company, not with individual investors.
Daniel Sahm, a partner at the tax firm Gärtner & Sahm in Rottenburg bei Landshut, specializes in tax issues related to capital investments. According to Sahm, the tax treatment of accumulating funds has been a point of criticism due to the higher tax and administrative burden it imposes. This is because taxation occurs before the inflow, resulting in a higher tax and administrative burden for investors.
Investors do not need to take any action themselves to receive the refund, but they can inquire about the status of refund applications with the fund company or the fund manager. If they have any concerns or questions, it's advisable for them to seek advice from a tax professional.
The Federal Fiscal Court has made a decision to allow foreign investment funds to reclaim capital gains tax on German dividends paid up to 2017 (Case No. I R 1/20). This decision could potentially benefit a large number of investors, as it opens up the possibility for refunds of incorrectly levied taxes.
In conclusion, the 2018 investment tax reform has brought about significant changes to the taxation system for investors. While there are still aspects that are subject to criticism, such as the tax treatment of accumulating funds, the overall simplification of the system is a step in the right direction. It's essential for investors to stay informed and seek professional advice when necessary to ensure they fully understand the implications of these changes.
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