Exemption order (Freistellungsauftrag)

The Freistellungsauftrag (exemption order) instructs your bank to pay out capital income tax-free up to the saver's allowance – without it, the bank automatically withholds 26.375% flat-rate withholding tax. This is how it works in Germany.

Amount in 2025:

• Singles: €1,000 per year
• Married couples: €2,000 per year (jointly)

How to set it up:

• Online banking: under settings/taxes – takes 2 minutes
• Branch: fill in and sign a form
• Several banks: split the amount across all banks/brokers (the total must not exceed €1,000!)

What happens without an exemption order?

• The bank immediately deducts 26.375% tax on EVERY euro of interest/dividends
• You only get the money back via your tax return (after 12–24 months)

Optimal split:

• Overnight money account: exemption order equal to the expected interest
• Securities account: the rest for dividends and the advance lump sum (Vorabpauschale)
• Tip: don't forget it at Trade Republic, Scalable etc. – neo-brokers need an exemption order too!