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Germany Capital Gains Tax Guide (Abgeltungsteuer 2026)

The Abgeltungsteuer is Germany's flat 25% withholding tax on capital gains from shares, ETFs, funds, bonds, and derivatives. Adding 5.5% Solidaritätszuschlag brings the effective rate to 26.375%. Church tax (8%–9% of the 25% tax) adds another ~1.4%, for a maximum total of ~27.8%. The Sparerpauschbetrag (€1,000 single / €2,000 married) shields the first portion of gains from tax entirely via a Freistellungsauftrag.

Unlike many countries where capital gains are taxed at your regular income rate, Germany applies a separate flat tax (Abgeltungsteuer) to most investment income. This means your gains from financial assets are taxed at a maximum of 26.375% regardless of your income level — which is advantageous for high earners and less beneficial for low earners who might otherwise fall below this rate. The system is designed for simplicity: tax is withheld at source by your broker or bank and remitted directly to the Finanzamt. For related reading, see our Savings Allowance Guide → and ETF Tax Guide →.

How Abgeltungsteuer Works

  • Flat 25% rate: All capital gains — including share sales, fund sales, bond interest, dividend income, and derivative profits — are taxed at a flat 25%. This is deducted at source by your German broker or bank (Kapitalertragsteuer) and paid directly to the tax office.
  • Soli surcharge: 5.5% of the 25% tax = 1.375 percentage points. Total so far: 26.375%.
  • Church tax (Kirchensteuer): If you are a church member, the bank withholds 8%–9% of the 25% tax, or about 2%–2.25% of the capital gain itself. Total with church tax: ~27.8%–28.6%.
  • Sparerpauschbetrag: The first €1,000 (single) / €2,000 (married) of investment income per year is tax-free. You must file a Freistellungsauftrag (exemption order) with your bank or broker to use this allowance. Without it, tax is withheld on the first euro.
  • Tax on losses (Verlustverrechnung): Losses from share sales can only be offset against gains from share sales (Aktienverlusttopf). Losses from other investments (funds, bonds, ETFs) are offset in the allgemeiner Verlusttopf. Each broker maintains separate Verlusttöpfe for you.

Teilfreistellung (Partial Exemption) and Opt-Out

  • Equity funds (Aktienfonds): 30% of all returns (dividends, gains, Vorabpauschale) from equity funds with >50% stock allocation are tax-free. For example, if your ETF distributes €1,000, only €700 is taxed at 26.375%.
  • Mixed funds (Mischfonds): 15% partial exemption for funds with >25% stock allocation. 0% for funds below 25% stocks.
  • Opt-out (Günstigerprüfung): If your personal income tax rate is below 26.375%, you can apply for a Günstigerprüfung (favourable rate check) on your tax return. The Finanzamt will then tax your capital gains at your lower personal rate instead of the flat 25%. This is beneficial for low earners (e.g., students, retirees with small pensions).
  • Foreign brokers: If you use a non-German broker, no Abgeltungsteuer is withheld at source. You must report your capital gains on your tax return (Anlage KAP) and pay the tax yourself. The tax rate is the same 25% + Soli. You may also need to deal with foreign tax credits.

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