Profits from the disposal of investment units

(1) Section 20(4) of the Income Tax Act applies accordingly to determining the profit from the disposal of investment units that do not form part of business assets. Section 20(4a) of the Income Tax Act does not apply. The profit is to be reduced by the advance lump sums taken into account during the holding period. The advance lump sums taken into account must be taken into account in full, notwithstanding a possible partial exemption under section 20.
(2) Where an investment fund no longer falls within the scope of this Act, its units are deemed disposed of. The fair market value of the investment units at the time the investment fund ceases to fall within the scope of this Act is deemed the disposal proceeds.
(3) Insofar as a person subject to unlimited tax liability does not hold its investment units as business assets, the following are equivalent to a disposal of investment units at fair market value: 1. the ending of the investor's unlimited tax liability as a result of giving up domicile or habitual residence, 2. the gratuitous transfer to a person not subject to unlimited tax liability, and, 3. subject to nos. 1 and 2, the exclusion or restriction of the Federal Republic of Germany's right of taxation as regards the profit from the disposal of the investment units. The first sentence applies only where 1. the sum of the taxable profits determined under subsection (1), section 22 and section 56 is in total positive, and 2. the investor a) has, within the last five years before the disposal within the meaning of the first sentence, held directly or indirectly at least 1 per cent of the investment units issued, or b) holds, at the time of the disposal within the meaning of the first sentence, directly or indirectly investment units in the investment fund whose acquisition cost amounts to at least EUR 500,000. Section 6(1), second and third sentences and (2) to (5) of the Foreign Tax Act and section 17(1), fourth sentence and (2), third to fifth sentences of the Income Tax Act apply accordingly. In applying section 6(3), first sentence, no. 2 and (4), fifth sentence, no. 5 of the Foreign Tax Act accordingly, the distributions under section 16(1) no. 1 take the place of the distribution of profits, and the tax-free returns of capital under section 17(1) take the place of the repayment of contributions. In the case of the first sentence, no capital gains tax is to be levied.