As part of the investment tax reform as of January 1, 2018, there was a so-called fictitious sale, which is to be considered purely for tax purposes. This process was used to determine the taxable profits for all fund units acquired before January 1, 2018.

Tax regulatory background:

With effect from January 1, 2018, the German Investment Tax Reform Act (InvStRefG) introduced a fundamental reform of the taxation of investment funds. In addition to the equal treatment of domestic and foreign investment funds under European law, the aim of the reform was above all to simplify the taxation of mutual funds at investor level.

In order to implement the new taxation, a fictitious sale of the fund units as of December 31, 2017 and a fictitious acquisition of the fund units as of January 1, 2018 had to be carried out for tax purposes only.

In connection with the notional disposal of the fund units as of December 31, 2017, a notional capital gain (loss) is also calculated. However, this was not immediately subject to taxation, but is only subject to tax withholding at the time of the actual sale and/or transfer with a change of creditor of the investment unit.

For sales or transfers from client custody accounts since January 2, 2018, the Fund Custodian Bank has taken into account the tax requirements described above.

Section 56 (4) of the German Investment Tax Act and the corresponding implementing provisions require the custodian banks to calculate the notional sale per security identification number (fund type) for all customer custody accounts in which investment fund units still exist that were acquired before January 1, 2018, by December 31, 2020, and to deposit them in the banking system at custody account level.

For each affected securities identification number (fund type), customers will receive a receipt for the notional sale as of December 31, 2017 and a receipt for the notional acquisition as of January 1, 2018. Please note that the unit holdings shown relate to the units in the fund at the time of preparation of the securities account statement that were acquired before 2018.

This notional sale and purchase entry will continue to be taken into account for tax purposes in the future only upon the sale or transfer of these affected fund classes.

Our customers do not need to take any further action in connection with the settlement of the fictitious sale.

You can find a sample of the fictitious sale receipt under this link
You can find the supplement to the receipt under this link