A final tax of 25% applies to capital gains. We explain how your capital gains are taxed and how to declare them in the Taxfix app.
What are capital gains and how are they taxed?
Investment income is income from financial investments. This includes, for example, gains on the sale of shares, interest from savings accounts or dividends from shares.
All taxpayers pay a uniform tax rate of 25% plus solidarity surcharge and, if applicable, church tax on investment income. This is the so-called final withholding tax (Abgeltungsteuer).
The final withholding tax is withheld directly by the bank and sent to the tax office. Every year, your bank sends you an overview of your investment income and the taxes incurred on it. You need this tax certificate or bank confirmation to be able to enter the income in your tax return.
What is the saver's allowance (Sparerpauschbetrag)?
As an investor, you can use a tax-free amount, also called the saver's lump sum (Sparerpauschbetrag). If you are single, you do not have to pay tax on capital income up to 801 euros per year. If married couples are assessed jointly, the amount doubles to 1602 euros. Only if you or your spouse's investment income exceeds this amount you have to pay taxes.
What is an exemption order (Freistellungsauftrag)?
In order to benefit from the lump-sum savings amount during the course of the year, you can apply to your bank for a so-called "exemption order" (Freistellungsauftrag). With this order, the bank only pays the taxes to the tax office if the capital gains exceed the saver's lump sum or the amount of the specified exemption order.
You can submit an exemption order directly to your bank. It applies to all investment income that you have earned at the bank. You can divide your exemption amount among as many banks as you like, as long as you do not exceed the total saver's allowance.
What can I do if I have not issued an exemption order?
If you do not have an exemption order, your investment income is taxed at 25% regardless of the amount. However, if the income does not exceed the saver's allowance of 801 euros, you have paid taxes wrongly.
In this case, you can easily reclaim these taxes with your tax return. All you have to do is enter your investment income in your tax return. You will then be refunded the excess final withholding tax.
Günstigerprüfung: The favourable tax treatment of capital gains
In the case of investment income, the tax office automatically carries out a so-called favourable tax treatment check (Günstigerprüfung) as part of the tax return. The tax office checks whether your personal tax rate is lower than the flat-rate withholding tax of 25%.
If your tax rate is lower, the capital income is taxed at your lower individual tax rate. If your tax rate is higher, the final withholding tax of 25% applies.
You can benefit from the favourable tax assessment if you declare your investment income in your tax return. The tax office carries out the check automatically, and the Taxfix app also takes it into account in the estimated calculation of your tax.
The favourable tax assessment cannot be to your disadvantage. In the worst case, the final withholding tax already withheld by the bank remains.
Do I have to declare capital gains in the tax return?
Investment income earned via a domestic bank only has to be declared in the tax return in two rare cases:
Exemption orders for more than 801 euros were inadvertently issued and claimed
You are a member of a religious community that levies church tax, have had a so-called blocking notice (Sperrvermerk) entered at the Federal Central Tax Office and had investment income above the lump sum for savers. In this case, the church tax due on the final withholding tax is only due in the course of the assessment for income tax
If neither of these cases exists, the declaration of investment income in the tax return is voluntary. However, due to the favourable tax treatment check, or if you have not issued an exemption order, it may be worthwhile to include the capital gains in your tax return.
What capital gains can I not declare with Taxfix?
Under certain circumstances, you may not be able to declare your capital gains with the Taxfix app.
This applies, among other things, to capital gains that were earned via a foreign bank or broker. You cannot declare this capital income with Taxfix due to its complexity. Please note, however, that such capital gains must always be declared in the tax return. You must therefore declare them elsewhere.
Our app asks you about the nature of your capital gains and determines whether we can support your tax case. If this is not the case, you will be informed directly.
ETFs, on the other hand, are supported by the Taxfix app. These are not complex financial instruments, but income from shares, which you can easily enter in our app.
How do I declare capital gains in the Taxfix app?
With the Taxfix app, you can easily enter capital gains in your tax return.
In the “Intro questions” category, you can indicate that you had capital gains. Then you can specify more precisely what kind of capital gains it was.
You can find information about capital gains and how to classify your capital gains in the app. Simply click on the small question mark symbol next to the corresponding questions in the "Intro questions" section. The "From shares" option includes all types of gains, e.g. from individual shares, ETFs or funds.
In the category "Income" you can then enter one or more bank confirmations (tax certificates) about the investment income. You will receive this certificate from your bank.