Withholding tax (Abgeltungsteuer)

German withholding tax (Abgeltungsteuer) is levied on private income from capital. Such income includes

  • dividends,
  • interests,
  • income from investment funds and certificates,
  • nearly all earnings from capital assets,
  • private capital gains from sale of stocks and
  • covered options and other payments from securities and derivatives. See § 20(1) EStG. 

Pursuant to § 43 a Para. 1 EStG the withholding tax rate is 25% plus solidarity surcharge of 5.5% on the final withholding tax and church tax (if applicable). This makes a total of tax rate of 26.375% (without church tax).  Capital gains arising from the sale of privately held shares bought before 31 December 2008 are generally not taxed. 

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