Are mutual funds included in the tax

Investment funds

With investment funds, the financial assets of numerous investors are bundled and invested in various assets. Depending on the type of investment fund, investments are made in securities such as stocks, in real estate or in various money market instruments. The tax treatment of investment funds depends on whether the increase in value of the investment fund results from income (e.g. interest, dividends) or from increases in value (e.g. price gains, increase in the value of a property).

Investment fund income, such as dividends, interest income or the sale of shares in corporations, is subject to capital gains tax. The custodian bank can, however, waive taxation if a sufficient amount of an exemption order has been issued or if a non-assessment certificate is available. Increases in value, including, for example, price gains, are tax-free.

Usually at the beginning of the year, investors receive a list of the income generated in the previous year. It shows, among other things, the percentage of the increase in value of the investment fund from tax-free increases in value (tax-free income) and the percentage of the increase in value from taxable income. If there is no exemption order or the exemption volume has already been exhausted, the dividend income is subject to 25% capital gains tax. The respective bank keeps these amounts and forwards them directly to the tax authorities.

Laws and Judgments (Sources)

ยงยง 43 ff. EStG

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