A report in the German media has revealed that the country’s Federal Finance Court is questioning the legality of a tax on share sales, throwing Finance Minister Hans Eichel’s budget plans into doubt.
According to the report in Handelsblatt, legal sources close to the situation claim that an unpublished decision will rule that the capital gains tax regime on speculative share gains introduced in 1999 is unconstitutional.
Prior to 1999, private investors who sold a security less than six months after buying it had to pay tax on the proceeds. In 1999, this period was extended to one year.
However, the court ruled that this measure violated the constitution, as it did not treat all investors equally.The finance ministry has played down the impact that the ruling may have on its budget plans, although observers believe a decision rejecting the tax could hamper Eichel’s attempts to bring down Germany’s budget deficit.
The report indicated that the court’s final decision on the matter is likely to be published next year.
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