a height of 25% according to German Income Tax Act (Art. 43 a Para. 3). Nevertheless, there can be possibility that losses from other securities transactions are added to the original loss. That leads to a paid tax on capital gains of more than 25% seen over the entire calendar year. Such a negative surplus will not been refunded by the tax authorities and is also not transferable to the following years. Advantages and disadvantages Taxpayers with middle and higher income who mainly receive income from capital gains have usually an advantage from this new method of taxation. The reason is the low flat rate of 25% instead of being taxed with the personal income tax rate. In Germany the highest personal income tax rate is 45%. Taxpayers with a small income have no disadvantage because of the alternative of being taxed with their personal income tax rate (see above). The lowest income tax rate starts at 14%. Another advantage or disadvantage depending on the view is the taxation of the sale of capital gains. Equity and investments funds are getting more unattractive through this kind of taxation. That only counts for new investments that were bought from 1 January 2009 on. All shares that were bought before that date do not fall under the new Abgeltungsteuer and are tax free when they were held more than 12 months. The flat rate tax rate of 25% is significantly lower than the highest income tax rate. Advantages only apply for investors whose marginal tax rate on the remaining income is equal or higher than the flat tax rate. There might be a breach of the principle of taxation based upon the competitiveness of the taxpayers. Before 2009 gains from capital income were taxed with 45% and from 2009 on are taxed with 25% plus 5.5% solidarity surcharge and church tax. That is the same for taxpayers with a personal income tax rate of 27%. The Abgeltungsteuer on capital gains leads to different taxation in comparison to the other income taxes that are based upon the personal tax rate (so called dualistic income taxation). Austria In Austria, a withholding tax on capital income took effect on January 1, 1993. The legal basis for the tax is the Austrian final taxation law (Endbesteuerungsgesetz). Luxembourg Since 2006, taxpayers who have tax liability in Luxembourg have been subject to a 15% flat rate withholding tax