DE Capital Gains

Section 1 — Quick Reference

Quick Reference

Field	Value
Country	Germany
System	Abgeltungsteuer (withholding tax on investment income)
Rate	25% + 5.5% solidarity surcharge = 26.375% total
Annual exemption (Sparer-Pauschbetrag)	€1,000 single / €2,000 joint (from 2023)
Loss offsetting	Capital losses can only offset capital gains
Church tax	Additional 8-9% on the 25% base if member
Exit tax	Yes — on departure with substantial shareholdings
Primary legislation	Einkommensteuergesetz (EStG) §20, §32d
Tax authority	Bundeszentralamt für Steuern / local Finanzamt
Verified by	Pending — German Steuerberater sign-off required

Section 2 — What is Taxed: Abgeltungsteuer

• Abgeltungsteuer scope — The Abgeltungsteuer (withholding/flat tax) applies to: Capital gains from disposal of shares, bonds, funds, ETFs; Dividends; Interest income; Gains from derivatives, CFDs, options; Crypto asset gains (treated as private sale transactions under §23 EStG) (§23 EStG)
• Final withholding tax nature — The 26.375% is a final withholding tax — German banks withhold it automatically. Income subject to Abgeltungsteuer is NOT added to the progressive income tax base (no further top-up unless electing progressive rates and the marginal rate is lower).

Section 3 — Annual Exemption (Sparer-Pauschbetrag)

Each individual has an annual tax-free allowance:

Sparer-Pauschbetrag allowance table

Status	Allowance
Single individual	€1,000
Jointly assessed couple	€2,000

• Allowance coverage and carry-forward — The allowance covers all investment income (dividends + interest + gains combined). Unused allowance cannot be carried forward.
• Freistellungsauftrag — Instruct your German bank to apply the exemption automatically (up to the €1,000/€2,000 limit across all banks).

Section 4 — Loss Offsetting Rules

• Loss offsetting (Verlustverrechnungstopf) — Capital losses (Verlustverrechnungstopf) can only be offset against capital gains: Share losses can only offset share gains (stricter rule from 2020); Other capital losses (e.g. bond gains) can offset each other; Unused losses carry forward indefinitely to future years; Capital losses cannot offset employment income or other income
• Verlustbescheinigung — Annual capital loss certificate issued by banks (Verlustbescheinigung) — can be used when filing tax return.

Section 5 — Substantial Shareholdings: Different Rules

• Substantial shareholding taxation — Teileinkünfteverfahren — For substantial holdings (≥1% shareholding in a company), gains are NOT taxed under Abgeltungsteuer. Instead, they are taxed under the Teileinkünfteverfahren: 60% of the gain is included in taxable income; Taxed at the progressive income tax rate (up to 45%); Effective rate: up to 27% (60% × 45%)
• Applicability regardless of company location — This applies regardless of whether the company is German or foreign.

Section 6 — Exit Tax (Wegzugsbesteuerung) — CRITICAL

• Exit tax imposition — Germany imposes an exit tax (§6 AStG) when an individual leaves Germany and holds a qualifying shareholding. (§6 AStG)
• Qualifying holding — ≥1% shareholding in a corporation at any point in the preceding 5 years. (§6 AStG)
• Trigger — Departure from Germany (ceasing German tax residence).
• What happens — Deemed disposal of the shares at market value — unrealised gains are taxed as if the shares were sold on the day of departure.
• Exit tax rate — Teileinkünfteverfahren (60% of gain at progressive rates)
• Deferral options — Moving within EU/EEA: tax can be deferred interest-free until actual disposal. Moving to third country (e.g. UAE, Singapore, UK): tax is immediately payable (or can be paid in 7 annual instalments in some cases)

This is a major planning consideration for anyone leaving Germany with significant company shareholdings.

Section 7 — Crypto Assets

• Crypto taxation under §23 EStG — Cryptocurrency gains in Germany are subject to special rules under §23 EStG (not Abgeltungsteuer): Holding period < 1 year: gain fully taxable at progressive rates (no flat 26.375%); Holding period ≥ 1 year: completely exempt from tax; Annual exemption for §23 gains: €1,000 total (not the €1,000 Sparer-Pauschbetrag); Loss offsetting: §23 losses only offset §23 gains (§23 EStG)

See de-crypto-tax for full crypto analysis.

Section 8 — Sources

• EStG §20 (investment income), §32d (Abgeltungsteuer), §23 (private sale transactions)
• AStG §6 (exit tax)
• Bundesfinanzministerium: bundesfinanzministerium.de
• BMF-Schreiben on Abgeltungsteuer

Working paper only. Exit tax (§6 AStG) analysis requires shareholding history and market value determination — engage a German Steuerberater before departing Germany with shareholdings ≥1%.