Germany: Loss recognized on settling option can be carried back to offset related income earned in earlier year
German Federal Fiscal Court decision
Can be carried back to offset related income earned in earlier year
The German Federal Fiscal Court held (file ref. XIII R 27/21) that a taxpayer could carry back losses recognized on settling an option to offset income earned with respect to the same option in an earlier year, and thereby reduce the associated tax liability in the earlier year.
KPMG observation
Investors may want to consider amending their tax returns in light of this decision, which deviates from the approach that has been taken by the tax authority and generally followed by banks.
Read a November 2022 report prepared by the KPMG member firm in Germany
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