Tax deferral model requires advertising tax benefits

The tax office may only apply the loss offset restriction for tax deferral models to a capital investment if the provider has also advertised corresponding tax benefits.

Losses in connection with a tax deferral scheme may essentially only be offset against later income from the same source. According to a ruling by the Münster Fiscal Court, whether the tax office may apply this restriction on offsetting losses depends not on what has actually occurred, but on what is expected to occur. This also applies if the provider - as in the case in dispute - fraudulently advertises returns achievable from the outset.