Germany: Securitization & Structured Finance

PwC reports, official pronouncements, Supreme Tax Court Cases from Germany

By decision of 18 December 2002, the German Supreme Tax Court held that the option premium received by the writer of an option (call or put) should be recorded as a liability in his books and only taken to income when realised. Under the date of January 12, 2004 the Ministry of Finance issued a decree recognising the Supreme Tax Court decision in principle but disallowing a tax deduction for risks from the option transaction exceeding the amount of the option premium. This article discusses the