Determination of capital gains tax
Purchase of 43/4 Cemex Fin. at 86.20 = 129,300. Exchange for a new 97/8 Cemex bond. Exchange ratio of €1,000 old to €950 new plus an Early Participation of €50 for early acceptance of the exchange offer. Bank settlement: 30% discount on purchase price of 129,300, including 24.45% capital gains tax, 5.5% solidarity surcharge, and 9% church tax = €10,859.35. Explanation: Old bond is traded, new bond is not yet, no market price available, according to §43 paragraph 2 sentence 9 of the Income Tax Act (EstG), no market price available according to §43a paragraph 2 sentence 10 of the EstG. According to the information provided, the old bonds are sold at the market value of the new bonds and the new bonds are purchased at the market value of the old bonds. Since the new bond is not traded, the replacement valuation basis is used. In my opinion, this is incorrect. The exchange should have been made at the redemption price of 100%, and the usual deductions would have been applied to the gain of €20,700, as the acquisition price is known. If the current settlement is followed, the new bond would not be booked at 100%, but at the price of the old bond, and then €20,700 would be taxed again at the redemption of 100%. This cannot be correct. Firstly, an acquisition price is known, and secondly, an issuer's bond cannot be booked at the price of an old bond just because there is currently no market price available. The interest difference between 43/4 and 97/8 alone does not match. Is someone making it very easy for themselves here?
