Deemed-distributed income

(1) Deemed-distributed income is the following positive income, determined under sections 37 to 41, that is not used by a special investment fund for distribution: 1. capital income under section 20 of the Income Tax Act, with the exception of tax-free accumulable capital income, 2. income from letting and leasing within the meaning of section 21 of the Income Tax Act, and profits from the disposal of land and rights equivalent to land, and 3. other income, with the exception of tax-free accumulable other income. Domestic equity income and other domestic income subject to tax deduction are not deemed-distributed income where the transparency option under section 30 was exercised.
(2) Tax-free accumulable capital income is 1. income from option premiums under section 20(1) no. 11 of the Income Tax Act, 2. profits under section 20(2), first sentence, nos. 1, 3 and 7 of the Income Tax Act; excepted are income from swap contracts insofar as the amount of the exchanged payment flows is determined by capital income under section 20(1) no. 1 or no. 7 of the Income Tax Act, and 3. profits from the disposal of investment units and special investment units.
(3) Other income is income that does not fall under sections 20, 21 and 23(1), first sentence, no. 1 of the Income Tax Act. Other income also includes income from the disposal of other assets within the meaning of section 23(1), first sentence, no. 2 of the Income Tax Act, where the period between acquisition and disposal exceeds one year, or, in the cases of section 23(1), first sentence, no. 2, fourth sentence of the Income Tax Act, exceeds ten years. Tax-free accumulable other income is profits from the disposal of currencies where the underlying obligatory transactions provide for performance delayed in time, but that are not forward transactions within the meaning of section 20(2), first sentence, no. 3 of the Income Tax Act. The provisions relating to tax-free accumulable capital income apply accordingly to tax-free accumulable other income.
(4) The deemed-distributed income is to be determined under section 37 with the proviso that income and income-related expenses are attributed to the investors insofar as they hold special investment units in the special investment fund at the time the income accrues or the income-related expenses are incurred. The deemed-distributed income is deemed to accrue at the end of the financial year in which it was received. On a disposal of special investment units before the end of the financial year, the deemed-distributed income is deemed to accrue at the time of the disposal. On a partial distribution of the income named in subsections (1) and (5) within four months after the end of the financial year, the deemed-distributed income is, by way of derogation from the second sentence, attributed to the investor at the time of the partial distribution. Where the distribution is insufficient to withhold the capital gains tax under section 50, including the federal- or state-law surcharge taxes on capital gains tax, as against all investors participating at the end of the financial year, the partial distribution is also deemed to accrue to the investors at the end of the financial year in which the income was earned by the special investment fund, and is deemed deemed-distributed income for the purposes of the tax deduction.
(5) Tax-free accumulable capital income is deemed deemed-distributed income at the end of the 15th financial year after the financial year of receipt, and is deemed to accrue at that time, insofar as it exceeds the losses of previous years and was not distributed by the end of the 15th financial year or in the previous financial years.
(6) Where a distribution of the income of the past financial year is not made at the latest four months after the end of the special investment fund's financial year, that income is deemed not used for distribution.