Save Taxes as an Investor: The Complete Guide for 2026

Investors earning capital gains in Germany pay 25 percent capital gains tax plus 5.5 percent solidarity surcharge and potentially church tax – totalling an effective burden of 26.38 to 27.99 percent. With tax exemption orders, loss offsetting, tax advantage checks and the choice of appropriate fund structures, this burden can be significantly reduced legally. Key to success are understanding tax allowances, distributing them across multiple accounts and consistent year-end planning.

How Capital Gains Are Taxed in Germany

Private investment taxation follows a clear pattern. Investors holding stocks, ETFs or bonds and earning returns pay a flat 25 percent capital gains tax. Added to this are 5.5 percent solidarity surcharge on the tax itself and 8 or 9 percent church tax if subject to church taxation. The bank deducts the amount directly and remits it to the tax office.

What Counts as Capital Gains

Capital gains include interest from savings products, dividends from stocks, distributions from funds and realised gains from selling securities. Returns from certificates and certain insurance products also fall under this. Unrealised gains remain tax-free as long as the security remains in the portfolio.

Overview of Effective Tax Burden

• Capital gains tax: 25 percent
• Solidarity surcharge: 5.5 percent on the tax
• Church tax: 8 or 9 percent (varies by state)
• Total burden without church tax: 26.38 percent
• Total burden with church tax: up to 27.99 percent

Save Taxes as an Investor: The Key Levers

Private investors who want to reduce their tax burden should combine several instruments. The saver's exemption allowance forms the foundation. Only the combination with loss offsetting, clever fund selection and tax advantage checks unleashes full effect. Each lever requires attention – but the effort often pays off within a few hours of administrative work per year.

Using the Saver's Exemption Allowance and Tax Exemption Order Correctly

Since 2023, the saver's exemption allowance stands at 1,000 euros per person, or 2,000 euros for married couples and registered civil partners. Capital gains up to this amount remain tax-free. However, a tax exemption order must be filed with the bank or broker.

Utilising the Allowance Across Multiple Accounts

Many investors hold accounts and portfolios at different institutions. In such cases, the tax exemption order can be flexibly split – for example, 600 euros at Bank A and 400 euros at Bank B. To use the allowance, the split should be reviewed annually as unused amounts expire at year-end.

What Happens Without a Tax Exemption Order

Without a filed tax exemption order, the bank automatically deducts taxes even if the saver's allowance remains unused. The money can be recovered later via tax return, but the interest effect is lost. Once issued, an order remains valid until revoked.

Using Loss Offsetting Strategically

Loss offsetting is one of the most effective tools to reduce tax burden. Realised losses offset realised gains, so only the balance is taxed. Banks automatically manage offsetting accounts for this.

General Offsetting Account and Stock Account

Tax law distinguishes two accounts. The stock account captures losses and gains from selling individual stocks. The general offsetting account collects losses from ETFs, funds, bonds and certificates. Stock losses can only be offset against stock gains, while other losses have broader application.

Loss Certificate by 15 December

Investors holding portfolios at multiple banks who wish to offset losses from one bank against gains from another need a loss certificate. The application must be submitted by 15 December of the current year at the latest. Missing this deadline means losses roll into the next year and can only be used then.

Tax-Loss Harvesting at Year-End

In November and December, it pays to review your portfolio carefully. Those holding positions at a loss can sell them deliberately, realise the losses and repurchase the securities afterwards. This creates offsettable losses without changing the long-term strategy.

Request a Tax Advantage Check from the Tax Office

If your personal income tax rate is below 25 percent, the flat capital gains tax is unfavourable. In this case, a tax advantage check is worthwhile. The tax office automatically applies your lower personal rate via tax return and refunds the difference.

Who Benefits from the Tax Advantage Check

Typical beneficiaries are students, apprentices, part-time workers, low-income retirees or those on parental leave. Once taxable income falls below the basic exemption of 12,348 euros for 2026, the entire return remains tax-free.

Tax Exemption Certificate for Low-Income Investors

Those permanently below the basic exemption can request a tax exemption certificate from the tax office. The bank will then refrain from withholding capital gains tax from the start. The form is numbered NV 1 A and is available from the responsible tax office.

Tax Exemption Certificate for Children and Retirees

The tax exemption certificate is valid for three years and must be reapplied for afterwards. It is particularly useful for child portfolios because children have their own basic exemption and saver's allowance. Many retirees also benefit as they fall below the threshold.

Partial Exemption for Funds and ETFs

Since the 2018 investment tax reform, funds and ETFs benefit from partial exemption. It compensates for the lack of foreign withholding tax credit at fund level. The rates depend on the asset class.

Partial Exemption Rates

• Equity funds and equity ETFs: 30 percent tax-free
• Mixed funds with at least 25 percent equity share: 15 percent tax-free
• Real estate funds: 60 percent tax-free
• Real estate funds holding predominantly foreign properties: 80 percent tax-free

Accumulating ETFs and the Advance Lump Sum

Accumulating ETFs do not distribute dividends but reinvest them. The deferral effect works long-term like an additional return booster. However, the tax office levies an annual advance lump sum, which is modest at low interest levels and is offset against later gains.

Reduce Capital Gains Tax Through Withholding Tax Optimisation

Investors in foreign stocks often pay twice: once through withholding tax in the company's country and once through German capital gains tax. Germany credits a maximum of 15 percent foreign withholding tax. Higher amounts, such as from Switzerland or France, must be actively reclaimed.

Ireland-Domiciled ETFs

For US stocks, choosing Ireland-domiciled ETFs helps. The double taxation agreement between Ireland and the US reduces withholding tax to 15 percent instead of 30 percent. Over years, this creates a noticeable return advantage.

Swap-ETFs as an Alternative

Swap-ETFs do not hold US stocks physically but replicate performance through swap transactions. Since no dividends flow directly, no withholding tax applies. Tax treatment through the advance lump sum remains unaffected.

Child Portfolio as a Tax Tool

A portfolio in the child's name opens a second saver's allowance and its own basic exemption. This allows capital gains to be received tax-free into the four-figure range. Parents should note that the money legally belongs to the child and becomes fully available upon adulthood.

Pre-2009 Holdings and Tax-Free Asset Classes

Securities purchased before 1 January 2009 enjoy grandfather's rights. Capital gains from these stocks or fund shares remain tax-free on sale up to 100,000 euros per person. A wealth transfer within the family can extend this advantage.

Gold, Cryptocurrencies and the Holding Period

Physical gold, gold ETCs with delivery option and cryptocurrencies like Bitcoin fall under § 23 EStG. After a holding period exceeding one year, gains are completely tax-free. Since 2025, there is also a 1,000 euro annual threshold for short-term private disposals.

Real Estate and the Ten-Year Speculation Period

Real estate also follows a holding period rule. Anyone holding a rental property for more than ten years can sell it tax-free. For owner-occupied residential property, the period shortens to the year of sale and the two preceding years in which the property served as personal residence.

Tax Tips for Investors: Avoid Common Mistakes

Many private investors pay more tax than necessary because they overlook typical pitfalls. The following points come up particularly often in practice and cost real money.

Missing or Poorly Distributed Tax Exemption Order

Investors holding multiple portfolios but filing a tax exemption order with only one bank often miss out on three-figure amounts annually. Annual stock-taking prevents this.

Loss Offsetting Across Year-End

Those forgetting the loss certificate in December don't lose the losses but shift them to the following year. In years with high gains, this works like an interest-free loan to the tax office.

No Tax Return Despite Refund Potential

Already withheld capital gains tax can only be recovered via Schedule KAP. Investors not filing a tax return miss out on the difference from tax advantage checks or unused allowances.

Wealth Transfer and Gifting

Investors holding larger amounts should know the gift tax exemptions. 400,000 euros can be transferred tax-free per parent and child every ten years. Between spouses the amount is 500,000 euros. Clever planning over decades can shift substantial wealth to the next generation without triggering inheritance tax.

Practical Year-End Checklist

1. Review tax exemption order and distribute across banks
2. Request loss certificate by 15 December
3. Review portfolio for realisable losses
4. Request tax exemption certificate for low income
5. Tick tax advantage check on tax return
6. Document foreign withholding taxes
7. Plan gifts within the family

When Professional Advice Is Worth It

For simple portfolios, self-research and careful tax filing suffice. However, once foreign returns, pre-2009 holdings, major gifts or mixed structures involving real estate and securities come into play, consulting a tax advisor is worthwhile. Advice costs are often less than the avoided tax in a single year.

Risk Disclosure and Liability

The information presented here does not replace individual tax advice. Tax laws change, and each investor's personal situation differs. Aktie.com assumes no liability for decisions made solely on the basis of this article. Those moving large amounts or planning complex structures should consult a tax advisor or specialist attorney.