Ask a tax advisor on the topic of Income tax return

Moving from Germany to abroad - expiration of loss carryforward pots?

November 30, 2019 | 50,00 EUR | answered by Steuerberater Knut Christiansen

Good day!

Currently, I am planning to move to Singapore for approximately 1-2 years with the intention of returning. At the moment, there are loss offsetting pots from stock market transactions, primarily in the "Other" pot (not in the "Stock" pot).

I would like to know if these losses expire with the removal of unlimited tax liability, or if they can be used for offsetting against any future gains after a few years. If there is a possibility for future offsetting: Is there a time limit for when a return must be made in order to avoid expiration (in case of an extension in SGP)? Do I need to ask my deposit banks for a written loss certificate, which must be submitted / included in the last tax return in Germany?

My first source so far is EStG R 10d., Paragraph 8 "Loss Deduction". As a tax law layperson, I am not aware of any other regulations or whether this regulation applies to losses from stock market transactions.

Thank you for clarifying the tax aspects of this situation!

Steuerberater Knut Christiansen

Good day and thank you for using ask-a-tax-expert.com!

I would like to answer your questions as follows within the scope of an initial assessment.

The loss carryforward does not expire if you are only partially subject to tax for a certain period of time (due to a temporary relocation to Singapore). However, the loss must be separately determined by the tax office. To do this, you need to request a loss certificate from your custodian bank and submit it to the tax office as part of your income tax return using form KAP. Once the loss has been determined, it can be offset against positive income in the following years.

I hope this answers your question, if not, please feel free to ask follow-up questions.

I would like to point out that this forum cannot replace personal advice. Rather, it is intended to provide an initial tax assessment. Missing or incomplete information about the facts can change the legal outcome.

Best regards,

Knut Christiansen
Tax Advisor