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Over the counter

Over the counter transactions are securities transactions in which the bank customer does not appear by name. These transactions are carried out at the bank counter. Investors usually buy blackboard in cash directly at the bank counter and, unlike in general practice, do not store them in the depot, but in their own safe or in a safe deposit box. The interest or dividend coupons cut off the savers from their papers and redeem them at the bank. An account is not affected. If over-the-counter transactions are carried out, the bank had to collect an increased interest discount of 35% on the investment income by the end of 2008 and pay it to the tax office.

If the over-the-counter transactions are carried out through domestic banks, there will be the advantage from 2009 that there will no longer be an increased interest discount of 35% plus solidarity surcharge on these revenues. As with income from the saver's account, only a flat rate of 25% withholding tax is due. Because the new law no longer provides for a special regulation for cash transactions.

The new regulation resulting from the tax system change from 2009 not only brings more net immediately if coupons or the proceeds from securities due are collected at the bank counter. Since the tax has a final effect, the income no longer has to be reported to the tax office. This saves queries as to why the securities are kept as effective pieces in a safe or where the funds for the former purchase come from.

In order to avoid the final withholding tax, the investor must have the investment income paid out beyond the limit. However, redemption abroad only has a tax deferral effect in that the interest is paid gross. Because they must then be reported to the tax office, which then levies the final withholding tax.

Laws and Judgments (Sources)

Section 43 of the Income Tax Act

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