Crediting withholding tax from Interactive Brokers & Tastytrade

On foreign dividends, the source country usually withholds tax straight away — 15 % on US shares with a valid W-8BEN. Germany credits this withholding tax (Quellensteuer) against your flat tax, but only up to the double-taxation treaty (DBA) rate and at most 25 % per item of income (§ 32d Abs. 5 EStG). Because Interactive Brokers, Tastytrade and DEGIRO issue no German tax certificate, you enter the creditable amount yourself on Anlage KAP, line 41.

This page shows how much of it is creditable, what you have to reclaim abroad, what withholding looks like in your broker export and how capi.tax prepares it.

How does the withholding tax credit work?

A foreign dividend is taxed twice: in the source country by the withholding, and in Germany at the 25 % flat tax plus solidarity surcharge. To avoid double taxation, the tax office deducts the foreign tax from your German tax. Three limits apply:

1. Treaty rate: only what the source country may keep under the treaty is creditable. Anything withheld above that, you have to reclaim from the source country (§ 32d Abs. 5 S. 1 EStG: the foreign tax is reduced by "an entitlement to a reduction that has arisen").
2. 25 % per item: no more than 25 % foreign tax on an individual item of capital income is ever credited (§ 32d Abs. 5 S. 1 EStG).
3. German tax on the foreign income: at most as much is credited as the German tax attributable to the year's foreign capital income (§ 32d Abs. 5 S. 3 EStG). Anything beyond that is lost — neither refunded nor carried forward.

The third limit matters when losses or the Sparer-Pauschbetrag (saver's allowance) push down your German tax. Part of the withholding tax can then go unused.

You report the dividend itself gross, before withholding. The withholding tax is not deducted from the income; it is credited against the tax.

US withholding tax on dividends: 15 % or 30 %?

The US withholds 30 % on dividends by default. If you have given your broker a valid W-8BEN form, the rate drops to the 15 % of Art. 10 of the Germany–US treaty. Both brokers usually ask for the W-8BEN when you open the account; it has to be renewed after a few years.

• With W-8BEN: 15 % withheld, 15 % creditable — nothing more to do.
• Without W-8BEN: 30 % withheld, but only 15 % creditable. You do not get the other 15 % back through the German return, only through a refund procedure with the US tax authority. That is laborious; for the future, the main fix is to update the W-8BEN.

On interest — for example on your cash balance at the broker — the US normally withholds nothing from private investors with a W-8BEN. If something is withheld anyway, it is not creditable in Germany under Art. 11 of the treaty. Price gains on shares or options usually carry no US withholding either.

Typical withholding rates and what is creditable

The following rates are typical — check the relevant treaty and your broker's current practice. They apply to dividends on shares you hold as a private portfolio investor.

Exception for the UK: distributions from British REITs (property income distributions) typically carry 20 % withholding, of which 15 % is creditable under the treaty. capi.tax uses a flat 0 % for the UK — check such distributions yourself.

Reclaimable withholding tax: what you recover abroad

The part above the treaty rate is the reclaimable withholding tax. Germany does not credit it; you only get it back by applying to the foreign tax authority. For Switzerland, for example, you apply to the Swiss Federal Tax Administration; for Denmark, to the Danish tax agency. For most countries you need a certificate of residence from your German tax office and a dividend statement as proof. Deadlines differ from country to country — often a few years from the payment.

Whether it is worth the effort depends on the amount: for small sums, fees and effort often exceed the refund. Either way, you must not enter the reclaimable part in line 41 or deduct it as an expense.

What does withholding look like in Interactive Brokers and Tastytrade exports?

Interactive Brokers lists withholding tax in the Activity Statement in its own section, Withholding Tax (German: Quellensteuer) — one line per dividend with a negative amount, such as AAPL(US0378331005) Cash Dividend … - US Tax. In the Flex Query it appears among the cash transactions as Withholding Tax. capi.tax identifies the country from the tag in the description (US Tax, CH Steuer), otherwise from the ISIN's country code and finally from the currency (CHF → Switzerland, CAD → Canada).

Tastytrade books withholding as a separate row of type Money Movement with sub-type Dividend and a negative value. Because Tastytrade carries almost only US securities and settles in dollars, capi.tax assigns these rows to the US.

If no country can be determined — for example a row in euros without an ISIN — you get a notice, and capi.tax conservatively applies only the 25 % limit. Check those cases yourself.

Reversals and corrections

Brokers fairly often correct withholding after the fact: Interactive Brokers then reverses the original tax (a positive line) and books a new one, for instance when the classification of a distribution changes or a W-8BEN takes effect retroactively. For your return, only the amount that finally stayed withheld counts.

capi.tax currently counts each of these lines as withheld. The Withheld and Excess columns then come out too high. The creditable amount stays capped by the treaty rate and is normally still correct — unless the tax was reversed completely. With corrections, net the lines for a security yourself and compare with the creditable amount.

Where does withholding tax go on Anlage KAP?

With a foreign broker, the creditable withholding tax goes on Anlage KAP, line 41 ("creditable foreign taxes not yet credited"). Line 40 is for taxes a German bank has already credited — it stays empty for Interactive Brokers, Tastytrade and DEGIRO. Line 42 is notional withholding tax (see below).

The dividends themselves go gross in line 19 (foreign capital income). Distributions from funds and ETFs, on the other hand, belong on Anlage KAP-INV; the withholding tax on them also goes in line 41 of Anlage KAP. More under Anlage KAP, KAP-INV & SO.

Dividends of German shares

If you hold German shares through Interactive Brokers — including via CapTrader or LYNX — the German paying agent (via Clearstream) already withholds Kapitalertragsteuer of 25 % plus solidarity surcharge on their dividends, 26.375 % in total (§ 44 Abs. 1 S. 4 Nr. 3 EStG). That settles the income tax on these dividends (§ 43 Abs. 5 S. 1 EStG): they belong on no line of Anlage KAP — not line 19 and not line 18 — and the German tax is not foreign withholding tax for line 41.

How capi.tax handles it: it recognises German shares by their ISIN (DE…) and compares the German tax withheld – in your statement, the DE Tax row for the dividend – with 25 % Kapitalertragsteuer plus 5.5 % solidarity surcharge on top, netting reversals and rebookings. If it matches, dividend and tax stay out of lines 18, 19 and 41; they do not appear in the withholding-tax overview either, but on the Anlage KAP tab in the section Dividends of German shares. If no German tax was withheld, the dividend is German income without tax deducted and goes in line 18. If the withholding differs, capi.tax does not count the dividend and points this out with a notice. Church tax is normally not withheld via Clearstream, because the paying agent does not know your denomination.

When you declare them anyway. If you pay church tax, you must declare the settled dividends for church tax (§ 51a Abs. 2d EStG): enter 1 in line 6 (assess church tax), the dividend in line 7, the Kapitalertragsteuer in line 37 and the solidarity surcharge in line 38. The tax office then only assesses church tax; the income tax stays settled and you do not pay it a second time. The same lines 7, 37 and 38 apply if you apply for the Günstigerprüfung (line 4) – then you must declare all capital income (§ 32d Abs. 6 S. 3 EStG). capi.tax shows the values in the section Dividends of German shares. If you declare income in line 7, a saver's allowance already used at German banks goes in line 16 instead of line 17 (see Anlage KAP). Lines 6, 7, 37 and 38 have the same numbers on the 2021 to 2025 forms.

No credit without a tax certificate. German Kapitalertragsteuer is only credited against a § 45a EStG tax certificate (§ 36 Abs. 2 Nr. 2 S. 2 EStG) — and your broker does not issue one. For church tax alone that does not matter. For the Günstigerprüfung, or if you declare the dividends voluntarily, say to use the saver's allowance (§ 32d Abs. 4 EStG), the income tax is recomputed without crediting the tax withheld – you risk paying twice. Clarify this with a tax advisor first.

How capi.tax computes the creditable withholding tax

capi.tax sets each withholding against the dividend of the same security and computes, per security:

creditable = the smallest of (withheld, treaty rate × gross dividend, 25 % × gross dividend)

In the results you see withholding tax by country with three values: Withheld, Creditable and Excess (the part you can only recover abroad). In the KAP overview, line 41 shows the sum of the creditable amounts — not the amount withheld.

Good to know:

• Treaty rates are on file for the USA, Canada, Switzerland, France, Ireland and the Netherlands (15 %) and the United Kingdom (0 %). For all other countries, capi.tax caps only at 25 %. For Denmark with 27 % withheld, that would be 25 % instead of the correct 15 % — adjust line 41 yourself in such cases.
• Interest: for interest from these countries capi.tax stores 0 % and does not credit withholding on it. Some treaties allow more — with Canada, for example, 10 % (Art. 11(2) of the Germany–Canada treaty); check such cases yourself.
• Fund distributions: for distributions from funds and ETFs, capi.tax does not yet compute the creditable amount; the withholding shows up there entirely as Excess. Work out the amount yourself. For funds, the tax authority's view is that the Teilfreistellung (partial exemption) also reduces the creditable withholding tax — see Teilfreistellung.
• Conversion: capi.tax converts dividend and withholding to euros at the Bundesbank reference rate on the payment date — see Currency conversion.

Worked example: a US and a Swiss dividend

The rates are example values. You have a valid W-8BEN.

US dividend (Apple, payment date at 1.0800 USD/EUR):

• Gross dividend USD 500.00 → €462.96
• US withholding 15 % = USD 75.00 → €69.44
• Treaty limit 15 % × €462.96 = €69.44 → €69.44 creditable, nothing to reclaim

Swiss dividend (Nestlé, payment date at 0.9500 CHF/EUR):

• Gross dividend CHF 300.00 → €315.79
• Swiss withholding tax 35 % = CHF 105.00 → €110.53
• Treaty limit 15 % × €315.79 = €47.37 creditable
• Not creditable: €110.53 − €47.37 = €63.16 — the 20 % (CHF 60.00) you can reclaim in Switzerland

On Anlage KAP:

• Line 19: €462.96 + €315.79 = €778.75 (gross)
• Line 41: €69.44 + €47.37 = €116.81

What remains in Germany (assuming your Sparer-Pauschbetrag is already used up, no church tax):

• 25 % × €778.75 = €194.69
• less €116.81 withholding = €77.88 flat tax
• Solidarity surcharge 5.5 % × €77.88 = €4.28, provided the Soli exemption threshold is exceeded — it is based on the tax after the credit

Without a W-8BEN the US would have withheld USD 150.00 (€138.89). Still only €69.44 would be creditable; you would have to reclaim the other half in the US.

Notional withholding tax (fiktive Quellensteuer)

Some older treaties with developing and emerging countries provided that Germany credits more withholding tax than was actually withheld — notional withholding tax (Anlage KAP, line 42). Most of these provisions have since expired or only apply to certain income. For dividends from the US, Canada or Europe it plays no role. capi.tax does not compute notional withholding tax, and the broker exports do not contain it. If you have income from a country with such a provision, check the individual case.

Related questions

• How much US withholding tax can I credit?
• What do I do with the 35 % Swiss withholding tax?
• Is unused withholding tax refunded or carried forward?
• Does this also apply to CapTrader or LYNX?
• Do I have to enter withholding tax even if it is fully creditable?

You can process your export in capi.tax right away and see your withholding tax by country.

Last updated: October 11, 2026