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equus

Risk of Ruin by taxation - check your destination country's tax rules for options

By equus, in General Board

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equus    26

equus
Posted (edited)

A little cautionary tale to those who might at some point be considering to move to another country and continue trading options - be sure to check the tax rules for options trading before you make the move, even if the country is well regarded.

 

Last year I made the move to Germany and became officially resident, only to find out that the tax laws had been changed a couple of years earlier to make options trading ruinously expensive. When it came time this January to file my taxes here, I discovered that I'm facing a tax bill of some several hundred percent on my trading profits from 2022, which fortunately were only modest. If it had been a good year this could have been ruinous but even so the tax is bill is still going to hurt quite a lot.

 

My tax advisor here (Steuerberater in German) advised me to leave the country. Another possibility apparently is to consider setting up a limited liability company (GmbH) as a vehicle through which to trade, since these regressive tax laws only apply to individuals and not companies. There is a Steadyoptions thread where these tax laws were discussed here. Here is a link to the accountants KPMG on the subject.

Edited by equus

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