Taxes for Equity Investments

Legal/ tax and helpful subjects

Taxation of profits and losses

3 minute read

All profits on Companisto, regardless of the type of investment, are considered investment income. This also includes returns from an equity investment. They are subject to capital gains tax (25 percent), solidarity surcharge (5.5 percent on capital gains tax) and, if applicable, church tax (8 percent or 9 percent on capital gains tax, depending on the federal state).

 

This results in a total charge of 26.38 percent. For equity investments, these taxes are paid directly by the startups themselves. Investors from Austria and Switzerland are subject to different tax regulations, which we have summarized in our Tax Guide for Equity Crowdfunding. You will also find information on the taxation of capital gains German investors generate through an Austrian startup.

 

As an investor in an equity investment, you can apply for an exemption order from the startups. You can do this on our platform. Please note that exemption orders can only be issued by private investors taxable in Germany and only for investments in German companies. You can apply for the exemption order through our platform.

 

Losses from an equity investment can be claimed for tax purposes and offset against other investment income. Capital gains from interest, dividends, and realized price gains from equity transactions are relevant for the offsetting of losses. If no investment income is available, the loss can be carried forward.

It is advisable to report losses from an equity investment as soon as possible. When the opening of insolvency proceedings is announced, the investors concerned should also assert their losses with the tax office. To do so, they should submit the following information to the tax office via the tax consultant:

  • Copy of the Participation Agreement and the Participation Certificate
  • Payment confirmation as proof of the investment made
  • Preliminary loss statement from Companisto (to be found in the startup's investor area under "Documents")
  • Confirmation of the opening of insolvency proceedings (to be found at Insolvenzbekanntmachungen.de)

If a company becomes insolvent, Companisto will provide the necessary information to all participating investors as a bundled packet. All you have to do to offset your losses is pass this information on to your tax advisor. You should always clarify the individual procedure for asserting losses with your tax advisor.

 

Would you like us to provide you with more articles on tax matters? Write us a comment!

 

Note: The information in this article is for general information purposes only and does not refer to the specific situation of any individual or legal entity. It does not constitute business, legal or tax advice. In specific individual cases, the present content cannot replace individual advice from experts. We assume no responsibility for decisions made by the user on the basis of the aforementioned information. Although we take the greatest possible care in selecting the information offered, we cannot be held liable for its correctness, accuracy and completeness.


 


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André Jasch
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