Save Taxes as an Investor: The Complete Guide for 2026

Anyone earning capital gains in Germany pays 25 percent capital gains tax plus solidarity surcharge and potentially church tax – a total effective burden of 26.38 to 27.99 percent. Using a tax exemption order, loss offsetting, and favorable assessment, as well as choosing appropriate fund structures, this burden can be legally and significantly reduced. Key are knowledge of the allowances, their proper distribution across multiple accounts, and consistent year-end planning.

How Capital Gains Are Taxed in Germany

The taxation of private investment follows a clear pattern. Anyone holding stocks, ETFs, or bonds and earning income from them pays a flat 25 percent capital gains tax. Added to this are 5.5 percent solidarity surcharge on the tax itself, as well as 8 or 9 percent church tax if one is liable for church tax. 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, fund distributions, and realized gains from the sale of securities. Income from certificates and certain insurance products also falls under this category. Unrealized gains remain tax-free as long as the security remains in the account.

Overview of effective tax burden

• Capital gains tax: 25 percent
• Solidarity surcharge: 5.5 percent of the tax
• Church tax: 8 or 9 percent (varies by federal 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 allowance forms the foundation. Only the combination with loss offsetting, clever fund selection, and favorable assessment unfolds its full effect. Each of these levers requires attention – but the effort often pays for itself after just a few hours of administrative work per year.

Using the Saver's Allowance and Tax Exemption Order Correctly

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

Utilizing the allowance across multiple accounts

Many investors have accounts and securities accounts at different institutions. In these cases, the tax exemption order can be flexibly split, such as 600 euros at Bank A and 400 euros at Bank B. Those who want to utilize the allowance should review the distribution 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 is still available. The money can be recovered later through a tax return, but the interest benefit is lost. Once issued, an order remains valid until revoked.

Strategic Use of Loss Offsetting

Loss offsetting is one of the most effective instruments for reducing tax burden. Realized losses offset realized gains, so only the net amount is taxed. Banks automatically maintain offsetting accounts for this purpose.

General offsetting account and stock account

Tax law distinguishes between two accounts. The stock account collects losses and gains from the sale of individual stocks. The general offsetting account pools losses from ETFs, funds, bonds, and certificates. Stock losses can only be offset against stock gains, while other losses have broader applicability.

Loss certificate by December 15

Investors who maintain accounts at multiple banks and want to offset losses from one bank against gains from another need a loss certificate. The application must be submitted no later than December 15 of the current year. If the deadline is missed, losses carry forward to 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 strategically sell them, realize the losses, and then repurchase the securities afterward. This creates offsettable losses without changing the long-term strategy.

Request Favorable Assessment from the Tax Office

If your personal income tax rate is below 25 percent, the flat capital gains tax is unfavorable. In this case, favorable assessment is worthwhile. Through the tax return, the tax office automatically applies the lower personal rate and refunds the difference.

Who benefits from favorable assessment

Typical beneficiaries are students, trainees, part-time workers, retirees with low income, or individuals on parental leave. Once taxable income falls below the basic personal allowance of 12,348 euros for 2026, the entire gain remains tax-free.

Tax Exemption Certificate for Low-Income Investors

Those who permanently remain below the basic personal allowance can request a tax exemption certificate from the tax office. The bank will then refrain from deducting capital gains tax from the outset. The form is numbered NV 1 A and is available from the appropriate tax office.

Tax exemption certificate for children and retirees

The tax exemption certificate is valid for three years and must be reapplied for thereafter. It is particularly useful for children's accounts because children have their own basic allowance and their own saver's allowance. Many retirees also benefit because they remain below the allowance.

Partial Tax Exemption for Funds and ETFs

Since the 2018 investment tax reform, funds and ETFs benefit from partial tax exemption. It is intended to compensate 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 with predominantly foreign property: 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 rates and is offset against later capital gains.

Save Capital Gains Tax Through Withholding Tax Optimization

Investors in foreign stocks often pay twice: once the withholding tax in the country where the company is based and once 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 ETFs domiciled in Ireland helps. The tax treaty between Ireland and the US reduces withholding tax to 15 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 their performance through swap transactions. Since no dividends flow directly, no withholding tax is due. The tax treatment via the advance lump sum remains unaffected.

Children's Account as a Tax Instrument

An account in the child's name opens a second saver's allowance and a separate basic allowance. This allows capital gains to be received tax-free well into four-digit amounts. Parents should note that the money legally belongs to the child and is fully available when the child reaches adulthood.

Legacy Holdings Before 2009 and Tax-Free Asset Classes

Securities purchased before January 1, 2009, are subject to grandfathering protection. Capital gains from these stocks or fund shares remain tax-free upon sale up to 100,000 euros per person. A transfer of assets within the family can extend this advantage.

Gold, cryptocurrencies, and holding periods

Physical gold, gold ETCs with delivery option, and cryptocurrencies like Bitcoin fall under § 23 of the German Income Tax Act. After a holding period of over one year, gains remain completely tax-free. Since 2025, a threshold of 1,000 euros per year also applies to short-term private asset dispositions.

Real Estate and the Ten-Year Speculation Period

Real estate also follows a holding period rule. Anyone who holds a rental property for longer than ten years can sell it tax-free. For owner-occupied residential property, the period is shortened to the year of sale and the two preceding years in which the property was used for personal residential purposes.

Tax Tips for Investors: Avoiding Common Mistakes

Many private investors pay more taxes than necessary because they overlook typical pitfalls. The following points appear particularly frequently in practice and cost real money.

Missing or poorly distributed tax exemption order

Those who maintain multiple accounts but have only filed a tax exemption order at one bank often give away three-digit amounts per year. An annual review prevents this.

Loss offsetting across year-end

Those who forget the loss certificate in December do not lose the losses but defer them to the following year. In years with high gains, this acts like an interest-free loan to the tax office.

No tax return despite refund potential

Already withheld capital gains tax can only be recovered through the capital gains schedule. Those who do not file a tax return forfeit the difference from favorable assessment or unused allowances.

Asset Transfer and Gifts

Those who hold larger amounts in their account should know the gift tax exemptions. Per parent and child, 400,000 euros can be transferred tax-free every ten years. Between spouses, the amount is 500,000 euros. Clever planning over decades can shift substantial wealth to the next generation without incurring inheritance tax.

Practical Year-End Checklist

1. Check tax exemption order and distribute across banks
2. Request loss certificate by December 15
3. Review portfolio for realizable losses
4. Request tax exemption certificate if income is low
5. Check favorable assessment box in tax return
6. Document foreign withholding taxes
7. Plan gifts within the family

When Professional Advice is Worth It

For simple accounts, self-research and a careful tax return suffice. However, once foreign income, legacy holdings, larger gifts, or mixed forms of real estate and securities come into play, consulting a tax advisor becomes worthwhile. The cost of advice is often less than the avoided tax burden of a single year.

Risk Disclaimer and Liability

The information presented here does not replace individual tax advice. Tax laws change, and every investor's personal situation is different. Aktie.com accepts no liability for decisions made solely on the basis of this article. Those who move large amounts or plan complex structures should consult a tax advisor or legal specialist.