According to Section 20 Paragraph 6 Sentence 5 of the Income Tax Act, losses from forward transactions can only be offset against profits from forward transactions and income from option premiums up to a maximum of EUR 20,000 in the year in which they arise. Remaining losses can be carried forward in the following assessment periods and offset against profits from forward transactions and option premiums up to a maximum of EUR 20,000 per year. Losses cannot be carried back.

The judges are convinced that this results in a double unequal treatment. Unlike the generally applicable loss offsetting area for capital market income, the loss offsetting area for income from futures transactions is further restricted. In addition, the limitation on the amount of loss offsetting for futures transactions, both in the year in which the transaction was made and in subsequent years, represents an asymmetrical taxation of profits and losses from futures transactions, which violates the objective net principle.

If you have any personal questions about the constitutionality of loss offset restrictions for forward transactions, please contact the experts at the Altehoefer law firm for international tax advice.