Bonus share
Bonus shares are shares that are issued at nominal capital from corporate funds; of the economic effect of bringing the issuance of bonus shares A share split. Synonyms are bonus share, additional shares or stock dividend. Also, the term bonus shares is partly used interchangeably, even if they are treated differently under German tax law to some extent.
- 2.1 Tax treatment in Germany
Bonus shares
The issue of bonus shares is usually justified by the fact that the stock by a smaller denominations and correspondingly lower price - similar to a stock split - was better tradable.
Balance sheet effect
Shares will be allocated to existing shareholders when the subscribed capital of a stock company by capitalization of reserves. This transaction is neutral with respect to the amount of equity as well as on the company's shares of each shareholder and the value thereof. Legal basis for the issuance of bonus shares is in accordance with the capital increase from company funds. § § 207-220 AktG.
Effect on the market price
By increasing the number of shares, the share price may fall. The first quotation of the new course will be marked for identification with "ex stock " or simply " ex BA ". Increases, for example, the share capital by 20%, then get the previous shareholders for every five shares with one share.
Share technical implementation
The capital increase from company funds must be approved by the General Meeting. The decision is then usually implemented after entry in the commercial register during the second half of the financial year. The new shares are entitled to be full - dividends, respectively, and are thus the existing shares by. For immediate full dividend rights, the bonus shares will receive the same securities identification number - WKN or ISIN. If only a pro rata dividend rights granted, the bonus shares are considered new shares and get a different security code number and will be listed separately on the stock exchange during the financial year. At the end of the fiscal year, this distinction falls away.
If the stock number is not an integer multiple of the conversion ratio in the custody of a shareholder, the balance is recognized in the form of share partial rights and usually rounded to the third decimal place. Thus, for example, 50 shares after the issue of bonus shares in the ratio 7:8 mathematically 57.143 shares, ie 57 full shares and a part right of 0.143 shares. The shareholder may be custodian bank instruct the 0.143 part to selling or zuzukaufen 0,857 fractional interests to come back to a whole number of units. Without instruction, the part right after a period of a few weeks are well sold.
Tax treatment in Germany
The access of bonus shares is not subject to income tax ( contrary to the dividends paid ). Peculiarities arise in the determination of the tax private sale proceeds. The bonus shares are acquired as at the date of purchase of the original shares. When sold, the purchase price of new and old shares is reduced in exchange for money. In the example above ( ratio of 1 to 5) at a voucher of 120 € a (tax ) Purchase price of 100 euros would result. Therefore sold the shareholder to 130 euros, so the taxable profit per unit would amount to 30 euros.
Bonus shares
Another variant of bonus shares Bonus shares. These are shares that are issued by a company or a third party without compensation to individual shareholders ( according to certain criteria, eg the holding period ) and which do not originate from a capital increase from company funds. This was, for example, the IPO of Deutsche Telekom (then called loyalty shares ) of the case.
As an incentive for private investors to hold these securities after the Erstemissionstag, the first IPO was granted a bonus share for every 10 held T- shares from 1996, after the expiration of a vesting period of 3 years for the shares issued. Also in the following two emissions in the years 1999 and 2000 were issued after a holding period of one year bonus shares. The number of reference enabled loyalty shares of the first IPO was limited to 30 pieces per person, in the subsequent two IPOs there was no limit.
Tax treatment in Germany
These bonus shares are recognized according to German tax law. § 20 Paragraph 2 No. 1 ITA been taxed as capital income in tax year of receipt. Decisive for the determination of income, according to the administration considers the lowest price of the T- shares, which has been traded on the day of the custodian posting of bonus shares on a stock exchange, see OFD Koblenz on 17 June 2005 - S 2252/2256 A. For the sake of the protection of the bonus shares in the first tranche were not subject to taxation, although taxable income templates, see BMF of 10 December 1999, BStBl. I 1999, S. 1129.
Income tax purposes, these bonus shares are in Germany at the time of issue of bonus shares acquired for the corresponding ent share the speculation period begins to run with the custodian credit. (see BMF of 25 October 2004, BStBl. I 2004, 1034)