Yes! P2P loans are interest gains and, like other investments, are therefore subject to capital gains tax. This is 25 percent plus solidarity surcharge. If necessary, you also have to pay church tax. The capital gains tax is also called the flat tax.
You benefit from the tax-free allowance of USD 801, which doubles for married couples to USD 1602. So you only have to pay taxes when you have reached your personal tax exemption limit. If your personal income tax rate is below the capital gains tax, If this is applied by the principle of the favorable assessment, it replaces the capital gains tax.
That means you have to tax your earnings at your lower personal tax rate and not pay the full 25 percent capital gains tax.
Both interest payments and default interest payments are relevant for the interest income. Default interest is penalty interest that borrowers must pay if they pay their installments too late. Secondary market earnings must also be taxed.
Can I have my taxes paid automatically, as with a share account?
No, unfortunately that will not work! Neither German nor foreign P2P platforms currently offer an exemption order. Unlike your stock portfolio, for example, you have to declare and pay your interest income from P2P loans yourself at the tax office.
Where can I get a tax certificate for my P2P system?
This depends on the country of origin of the P2P credit marketplace. German P2P platforms such as Good Lenders Credit, Lite Lending or Credisure Finance send you a written certificate for the tax office once a year, which you can simply enclose with your annual tax return. Most of these tax certificates are issued in the first quarter.
You have to find out or look for your interest income yourself. More on the details later in another article. In principle, the tax certificates should be easily accessible via the menu.
Where do I have to enter my P2P profits in the tax return?
Can I offset losses?
No. Losses cannot be offset in the current legal situation. Interest that is not paid cannot be claimed as lost income against the tax office. Accordingly, they cannot be deducted as lost revenue, loss or advertising costs. The same applies to the repayment portion of the repayment. Irrecoverable private loan claims are in most cases not taxable.
Taxing P2P loans is generally not difficult. The investment, like other investments, is normally charged with the capital gains tax. You should make sure that you register your P2P income with the tax office early and at the latest when you exceed the allowance of $ 801 per year. Note that you cannot offset losses for tax purposes.
Of course, you simply cannot tax your earnings and see if you can get away with it. I would never recommend this route to you! Karma always strikes back…
You need to remember the following about P2P loans and taxes:
- Capital gains tax and a solidarity surcharge apply to interest gains from P2P loans. For some investors, church tax still applies.
- The allowance is currently USD 801 a year.
- If your income tax rate is lower than the capital gains tax, you pay less tax. Instead of 25 percent withholding tax, you only have to earn interest on your personal tax rate. This saves you money. The principle is called an inexpensive test.
- You cannot count your losses. This is a tax disadvantage of P2P loans.
- German credit marketplaces usually send you a tax certificate annually
- Foreign credit marketplaces don’t. You have to be active yourself.