Flat tax & allowance

In Germany, investment income is not added to your other income. It is taxed at a flat rate instead: the Abgeltungsteuer of 25 % (§ 32d Abs. 1 EStG), plus the solidarity surcharge and, if applicable, church tax. With a foreign broker such as Interactive Brokers, Tastytrade or DEGIRO, nobody withholds this tax – you declare your income yourself and the tax office assesses the tax. capi.tax gives you the tax base and the figures for the Anlage KAP.

How high is the Abgeltungsteuer?

The principle is simple: 25 % on your capital income, after loss offsetting and the saver's allowance. On top come:

• the solidarity surcharge (Solidaritätszuschlag) of 5.5 % of the Abgeltungsteuer (§ 4 SolZG),
• church tax of 8 % (Bavaria, Baden-Württemberg) or 9 % (all other states) of the Abgeltungsteuer, if you belong to a religious community that levies it.

The overall burden:

The rate with church tax is not simply 25 % + 9 % of 25 % because church tax is deductible as a special expense, and the law builds that deduction straight into the formula. The Abgeltungsteuer is then (e − 4q) / (4 + k), where e is the capital income, q the creditable foreign tax and k the church tax rate (§ 32d Abs. 1 S. 3–5 EStG).

The solidarity surcharge exemption threshold, which since 2021 has freed most wage and income tax payers from the surcharge, does not apply to the Abgeltungsteuer (§ 3 Abs. 3 SolZG). Capital income bears the full 5.5 %. If you apply for the Günstigerprüfung (see below) and the normal scale actually turns out lower for you (§ 32d Abs. 6 S. 1 EStG), your capital income is taxed under the normal scale – and then the threshold can apply again.

Why do you have to declare everything with IBKR, Tastytrade and DEGIRO?

A German broker is a domestic paying agent. It withholds the tax directly, keeps the loss offset pots and applies your exemption order (Freistellungsauftrag). The tax is then usually settled.

Interactive Brokers, Tastytrade and DEGIRO are not. They withhold no German tax and issue no German tax certificate. For this case, § 32d Abs. 3 EStG says: capital income that was not subject to German withholding must be declared in your income tax return. The tax office then levies the Abgeltungsteuer in the assessment – at the same 25 %.

That covers everything your account produces in the year: gains and losses from shares, options and futures, option premiums from writing options, dividends, interest on your cash balance and fund income. Church tax is also levied in the assessment, since nothing was withheld at source (§ 51a Abs. 2d EStG). The exception is dividends of German shares on which German Kapitalertragsteuer was already withheld – see Dividends of German shares.

The saver's allowance (Sparer-Pauschbetrag)

Since 2023 the first €1,000 of your capital income is tax-free, or €2,000 for jointly assessed couples (§ 20 Abs. 9 EStG; up to 2022 it was €801 / €1,602). Three things matter:

• Once across all accounts. The allowance is per person and year, not per broker. If you have a German savings account with an exemption order and an IBKR account, both share the same amount.
• No actual costs. Custody fees, data subscriptions, margin interest or books cannot be deducted on top – they are covered by the allowance. Transaction costs are different: commissions on buying and selling reduce your gain directly (§ 20 Abs. 4 EStG), and capi.tax includes them.
• No exemption order with a foreign broker. Only a domestic institution can apply an exemption order. With IBKR, Tastytrade and DEGIRO you get the allowance through your tax return instead: the tax office deducts it automatically in the assessment. In the Anlage KAP you only state how much of it was already used through exemption orders at German banks.

capi.tax does not deduct the saver's allowance. The tool sees one file for one account; it does not know whether you have already used the allowance at a German bank or are jointly assessed. The figures shown are therefore the gross values you enter in the Anlage KAP.

Worked example: how the tax office calculates

All figures are example values, already converted to euros. A single investor without church tax has the following at Interactive Brokers in 2025:

€120.00 of US withholding tax (15 %) was deducted from the dividends. She has not used an exemption order at a German bank.

1. Capital income: €5,800.00
2. minus saver's allowance: €5,800.00 − €1,000.00 = €4,800.00
3. Abgeltungsteuer 25 %: €1,200.00
4. minus creditable withholding tax: €1,200.00 − €120.00 = €1,080.00
5. Solidarity surcharge 5.5 % of €1,080.00: €59.40
6. Total tax: €1,139.40

With 9 % church tax it looks like this: (€4,800.00 − 4 × €120.00) / (4 + 0.09) = €4,320.00 / 4.09 = €1,056.23 Abgeltungsteuer. Add €95.06 church tax (9 %) and €58.09 solidarity surcharge (5.5 %), for a total of €1,209.38.

How withholding tax is credited and where its limits are is explained under Foreign withholding tax. Why the share losses could be offset against the share gains here is covered in Loss offsetting.

What tax does capi.tax show?

The results show a reference tax: 25 % Abgeltungsteuer plus 5.5 % solidarity surcharge on the taxable total after loss offsetting and partial exemption. If you paid foreign withholding tax, capi.tax also shows how much German tax remains after crediting it. Both are a guide, not a tax assessment. Not included are:

• the saver's allowance,
• church tax,
• a loss carryforward from the previous year,
• the Günstigerprüfung,
• income from other accounts.

What counts is what the tax office assesses from your complete return.

Günstigerprüfung: when your personal rate is lower

If your personal tax burden is below 25 % – roughly: your marginal tax rate –, you can apply for the Günstigerprüfung (§ 32d Abs. 6 EStG). The tax office then calculates once with the Abgeltungsteuer and once with your normal income tax scale, adding the capital income to your other income – and applies whichever is lower. Applying cannot put you at a disadvantage.

This is mainly relevant for students, retirees, people on parental leave or working part-time – in short, with a low total income. If your taxable income including capital income stays below the basic tax-free allowance, the tax on your capital income can disappear entirely.

Two rules still apply: the application always covers all of your capital income for the year, not individual items. And the saver's allowance still applies under the normal scale – actual expenses remain non-deductible. You apply by ticking the box in the Anlage KAP.

Where do I enter the figures?

Income from a foreign broker goes in the Anlage KAP block for capital income not subject to German withholding. capi.tax outputs the lines for your tax year; for the 2025 assessment they are:

• line 19: foreign capital income in total (interest, dividends, results from shares and derivatives),
• line 20: of which gains from share sales,
• line 22: losses excluding share losses (for options traders mostly derivative losses),
• line 23: losses from share sales,
• line 41: creditable foreign taxes.

For 2021 to 2024 there are additional derivative lines: line 21 for option premiums and derivative gains, line 24 for derivative losses. Those losses go only on line 24 and are not included in line 19; capi.tax leaves them out of line 19 for those years accordingly. Fund income does not go in the Anlage KAP but in the Anlage KAP-INV. The details per year are under Anlage KAP, KAP-INV & SO.

Related questions

• Do I even have to declare income from a foreign account?
• Can I give a US broker an exemption order?
• Are my commissions taken into account?
• Why does the reference tax differ from my tax assessment?
• Is there a solidarity surcharge on capital income even if I pay none otherwise?

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Last updated: October 11, 2026