Introduction

What the Abgeltungsteuer does

The “withholding-and-done” concept aims to tax capital income simply at source: banks and brokers withhold a flat tax and remit it to the tax office. For most taxpayers, this finalizes the liability for those items; no detailed expense tracking is needed because a lump-sum allowance applies.

When the flat tax is not final

The flat tax doesn’t always end the story. If you file a return anyway (for other reasons) or if your marginal rate is below 25%, you may opt into the progressive tariff via the Günstigerprüfung so that capital income is included in the general income tax calculation.

Coexistence with special regimes

Investment funds are taxed under a special system (InvStG): funds themselves pay certain taxes, while investors recognize distributions, realized gains, and the Vorabpauschale (deemed income) annually. The bank still withholds the flat tax where applicable.

1) Legal Basis and Official Sources

• Statutory flat rate: §32d EStG — 25% separate tariff for capital income. :contentReference[oaicite:0]{index=0}
• BMF guidance (comprehensive): BMF circular “Einzelfragen zur Abgeltungsteuer” (14 May 2025). See topics on Günstigerprüfung, loss nets and cross-institution offset. :contentReference[oaicite:1]{index=1}
• Church tax automation (KiStAM): BZSt info for payers et for individuals. :contentReference[oaicite:2]{index=2}
• BMF overview page (resources & forms): Abgeltungsteuer — BMF. :contentReference[oaicite:3]{index=3}

2) Scope and Rates

• Tarif normal : 25% flat tax on private capital income (interest, dividends, certain realized gains, etc.) under §32d(1) EStG, plus 5.5% solidarity surcharge on the tax, and church tax where applicable. :contentReference[oaicite:4]{index=4}
• Progressive tariff exceptions: Certain items (e.g., significant shareholder distributions, special cases) may be taxed under the general tariff by rule or choice—see below on the Günstigerprüfung. :contentReference[oaicite:5]{index=5}

3) Sparer-Pauschbetrag & Exemption Handling

The lump-sum allowance is €1,000 per person and €2,000 for jointly assessed couples (unchanged since 2023). File a Freistellungsauftrag with your bank to apply it at source; otherwise, claim it in your return. :contentReference[oaicite:6]{index=6}

Note: Actual expenses are generally not deductible for private capital income; the lump-sum allowance applies—even when you opt for the Günstigerprüfung. :contentReference[oaicite:7]{index=7}

4) Withholding, Church Tax & Certificates

• Bank withholding: Banks/brokers withhold the flat tax automatically. You’ll receive an annual tax certificate (Steuerbescheinigung). :contentReference[oaicite:8]{index=8}
• Church tax automation: If registered with a tax-levying church, the bank retrieves your KiStAM attribute from BZSt and withholds church tax automatically; you may object to data retrieval with BZSt. :contentReference[oaicite:9]{index=9}
• Non-filers: For many with only bank-withheld income, the withholding settles the liability; filing is not mandatory solely for that reason.

5) Loss Offsets (Verlustverrechnung)

• Share losses pot: Losses from the sale of shares may only offset gains from share sales (the “Aktienverlusttopf”). Banks net within the institution; broader netting is done in assessment. :contentReference[oaicite:10]{index=10}
• Other capital losses: Other §20 EStG losses net against other positive capital income. Cross-institution netting can be requested in the tax return; the BMF circular explains ordering and procedure. :contentReference[oaicite:11]{index=11}
• Term transactions & loss caps — update: The special €20,000 loss cap and separate “term transactions” pot introduced in 2021 were abolished by the 2024 Annual Tax Act; applies to open cases from 6 Dec 2024 (and practically from 2024). :contentReference[oaicite:12]{index=12}

6) Investment Funds & the Vorabpauschale

Under the Investment Tax Act (InvStG), investors may be taxed on a deemed minimum return (Vorabpauschale) each year if fund performance and the year’s basis interest justify it. The BMF set the 2025 basis interest at 2.53%; the 2025 deemed income is considered received on the first working day of 2026 for tax purposes. :contentReference[oaicite:13]{index=13}

In years with negative or very low basis interest (e.g., 2021/2022), no deemed income arises; from 2023 onwards, positive basis rates returned. :contentReference[oaicite:14]{index=14}

7) Günstigerprüfung (Opting into the Progressive Tariff)

If your personal progressive tariff would tax your capital income below 25% overall, you can elect the Günstigerprüfung under §32d(6) EStG in your return; then the capital income is included in the general calculation. The BMF’s 2025 circular sets out conditions and mechanics. The Sparer-Pauschbetrag still applies; actual expenses remain non-deductible. :contentReference[oaicite:15]{index=15}

9) Compliance Checklist & Useful Links

• Set/allocate your Freistellungsauftrag across banks (up to €1,000/€2,000).
• Vérifier KiStAM status if subject to church tax.
• Track loss pots (shares vs. other capital) and request cross-institution netting in your return if needed.
• For funds, note the year’s basis interest and potential Vorabpauschale.
• Consider the Günstigerprüfung if your effective tariff is below 25%.

• §32d EStG — separate capital income tariff (25%): official text. :contentReference[oaicite:17]{index=17}
• BMF 14.05.2025 circular on Abgeltungsteuer (loss nets, cross-bank offset, Günstigerprüfung): PDF (EN ANGLAIS). :contentReference[oaicite:18]{index=18}
• Freistellungsauftrag & allowance (2023–2025 €1,000/€2,000): Finanztip guide. :contentReference[oaicite:19]{index=19}
• Church tax automation: BZSt (institutions) / BZSt (individuals). :contentReference[oaicite:20]{index=20}
• Vorabpauschale — 2025 basis interest 2.53% (BMF): PDF (EN ANGLAIS). :contentReference[oaicite:21]{index=21}

10) FAQ