Capital Gains Taxation in Germany

British Tax Review No. 6, pp. 620-627, 2005

13 Pages Posted: 4 Mar 2010

See all articles by Wolfgang Schoen

Wolfgang Schoen

Max Planck Institute for Tax Law and Public Finance, Department of Business and Tax Law

Date Written: December 1, 2005

Abstract

How to treat capital gains in the framework of individual income and corporate taxation has been the subject of extensive legislation and academic discussion. Germany's income tax distinguishes between business income, where capital gains and losses form part of an extensive concept of income, and an individual's “private” gains, where only certain disposals are covered by income tax. Practical problems arise on how to separate income into business and private income. Gradually, the exempt status of private capital gains is being eroded: tax reform projects plead for an alignment of capital gains treatment for all sources of income. However, a systematic treatment of some basic problems of capital gains taxation such as inflation-adjustment is still lacking.

Keywords: German tax law, income tax law, corporate tax, business taxation, capital gains, capital gains taxation

Suggested Citation

Schön, Wolfgang, Capital Gains Taxation in Germany (December 1, 2005). British Tax Review No. 6, pp. 620-627, 2005. Available at SSRN: https://ssrn.com/abstract=1551347

Wolfgang Schön (Contact Author)

Max Planck Institute for Tax Law and Public Finance, Department of Business and Tax Law ( email )

Marstallplatz 1
Munich, 80539
Germany

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