Best forex brokers 2017 / Taxes in Forex Trading

Taxes in Forex Trading

Who is actively engaged in the Trading, itself should also worry about the taxes. All profits from the trade must be taxed and so we want to show you below some information about the flat tax or capital gains tax.

The most important thing about the taxes in Forex

  • Gains in Forex trading must be taxed
  • The withholding tax applies to all types of investment income
  • The tax rate is a flat rate at 25 percent
  • As dealt with the taxation on the part of the broker depends on the seat of the company
  • meaningful tax expert

1.) What is the withholding tax?

What is the withholding tax?

Trader must pay tax on profits in forex trading One own Forex Control does not know the German tax legislation: Depending on the legal structure of trade falling profits either under the regular income tax or the flat-rate withholding tax. This tax was introduced in 2009 and applies to all types of investment income. As capital returns all profits are called from an investment. These include:

  • Interest on savings accounts or checking accounts
  • Income from certificates
  • Dividend payments in shares
  • Gains on sales of securities

Before the introduction of the flat tax different types of investment income were taxed at different rates and the flat tax is the standardization and simplification, a flat rate at 25 percent. Added to this, the solidarity surcharge and possibly even the church tax.

Conclusion: In order to simplify the taxation of different types of capital gains was introduced the flat tax in 2009, the standard rate is all achieved investment income within one year with a rate of 25 percent. As capital gains are, for example, passbook interest or income from trading in securities.

2.) Forex Trading Tax: delivery or cash settlement?

Unlike the trading of securities, the flat tax in Forex trading does not intervene automatically, because they are real assets in foreign currency. What is relevant is whether traders against their broker, at least theoretically, an extradition claim on currencies. Is that the case must pay tax on their profits from forex by net income less financing costs in the income tax return be given trader. It is the personal tax rate. The situation is different when a contract on cash payments between broker and client, are charged against profits in forex trading.Customers are then not owners of foreign currency, but only have a right to participation through compensation. In this case it is legally considered a form of futures contracts, whose profits fall under the flat tax. The control is flat at 25 percent plus. Solidarity surcharge and any applicable church tax.

Traders with a personal income tax rate below 25 percent can specify their profits alternatively under the personal income tax return. For the final withholding tax applies an annual allowance in the amount of 801 Euro, which is perceived by the account-holding broker to be granted exemption order. The legal basis of trade as reflected in the contract and terms and conditions of a broker. Losses from derivative transactions can be offset for tax purposes with all other types of savings. Here offer CFDs over all other types of income benefits: losses from equity transactions can not be offset against dividend income, for example. The adjustment shall be made initially to broker level. If the broker changed in a tax year, a loss certificate is requested, allowing the transfer to another broker.

Conclusion: In forex trading, it is not self-evident that the final withholding tax applies, as there are real assets in foreign currency. Is there at least one entitlement to the delivery of the foreign currency, the income will be taxed at the personal tax rate. When trading CFDs, will participate at the only on the performance of a currency pair, the flat tax applies. There is this an annual allowance of 801 euros.

3.) In the seat of the broker it comes

3.) In the seat of the broker it comes

As trader must pay tax on profits with Forex also depends on the seat of the broker. If the broker not paying the German tax authorities (which is z. B. with brokers of the case, which are only represented in Germany by a branch) is the flat tax does not automatically to the tax authorities. Trader must then report their winnings to the relevant tax authority itself. This message should remain under no circumstances: By international accounts schedules untruths are very common within the long statute of limitations for fraud to light. When it comes to a broker in Germany, it is usually the case that the flat tax will automatically be deducted and the trader does not have to worry about paying taxes. The independent transfer the flat tax offers traders liquidity advantages because gains (distinguish the procedures slightly) not by any trade or once per month taxed and the tax is charged to the account.  The good news: Where incur trade tax in Forex, also gains are scored! Who is not sure about the current legal, should in any case apply to a tax expert and be informed expertly.It is also recommended, in a Forex account compared the Terms of brokers to study concerning tax to know exactly how is the way forward.

Conclusion: As dealt with the taxation of capital gains by the Broker, depends primarily on where is the head office of a trading agent. For foreign suppliers the taxation is left to the traders. It is recommended to always apply in tax matters to a specialist.

4.) Conclusion on Forex Trading Tax

Gains that are realized in Forex trading, are in most cases the withholding tax. This is applicable to all capital gains and is a flat rate 25 percent. Added to this is the solidarity surcharge and possibly church tax. Whoever acts with a broker should know that the approach to the taxation is not always the same. Brokers who are resident in Germany, the withholding tax is generally retained automatically and foreign brokers leave their taxation traders. It is important to address in terms of taxes to an expert and to learn in detail how to be dealt with made forex gains.

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