Flat-rate withholding tax (Abgeltungsteuer)

The Abgeltungsteuer (flat-rate withholding tax) is the flat taxation of all capital income in Germany since 2009.

The tax rate:

• 25% flat-rate withholding tax
• + 5.5% solidarity surcharge (on the 25%)
• + 8–9% church tax (if you are a church member, on the 25%)
• Effective: 26.375% (without church tax) or 27.82–27.99% (with church tax)

What is taxed?

• Interest (overnight money, fixed-term deposits)
• Dividends (shares, ETFs)
• Capital gains (when selling shares, ETFs, bonds)
• MINUS the saver's allowance (€1,000/year)

Automatic deduction: the bank pays the tax to the tax office automatically. You don't have to declare anything in your tax return (unless you want a more-favourable-rate check).

Günstigerprüfung (more-favourable-rate check): if your personal tax rate is below 25% (e.g. as a student or low earner), you can claim back the difference in your tax return.