Vorabpauschale at Trade Republic 2026 — What You Need to Know
Trade Republic is Germany’s largest neo-broker with over 5 million customers — and processes the Vorabpauschale (Germany’s annual advance lump-sum tax on accumulating ETFs) directly inside the app. This guide explains in detail how Trade Republic deducts the tax, on which day it happens, what to do if your settlement account is empty, and where to find the official tax certificate. Step by step through the process.
How does Trade Republic deduct the Vorabpauschale?
Trade Republic acts as a German tax-resident broker and automatically remits the withholding tax on the Vorabpauschale to the German tax office (Finanzamt) — you don’t need to declare it separately on your tax return if you live in Germany. The mechanics:
- In early January 2027, Trade Republic calculates the Vorabpauschale for every ETF held on January 1, 2026 (value × 2.29 % × 0.7 minus any distributions paid).
- The Vorabpauschale is reduced by the equity partial exemption (30 % for equity ETFs) and taxed at 26.375 % (capital gains tax + solidarity surcharge).
- The resulting tax is debited directly from your Trade Republic settlement account, usually within the first few business days of the new year.
- The transaction appears under Profile → Activity as „Tax — Vorabpauschale“ with a reference to your tax certificate.
If you have an active Freistellungsauftrag (the German €1,000 tax-free saver allowance) at Trade Republic and it’s not fully used yet, the Vorabpauschale is offset against the remaining allowance — and may be reduced to zero.
When exactly does the posting happen?
Trade Republic’s terms commit only to „within the first business days of the new year“. In practice the posting typically occurs between January 2 and 5. There’s no advance push notification — you only get an activity notification on the day of the posting itself.
Tip: Check your settlement account on January 2, 2027. If the balance drops by a tax amount (typically €30–200 per €50,000 in equity ETFs), the Vorabpauschale has been posted. By end of January, all postings should be complete.
What happens if your settlement account is empty?
Unlike some banks, Trade Republic does not force-sell ETF units to cover the Vorabpauschale. Instead, the account is moved into negative balance (overdraft) and charged the current overdraft interest rate (as of May 2026: 2.00 % p.a. pro-rata on the negative balance).
You receive a push notification asking you to top up the settlement account. Options to clear the negative balance:
- SEPA Instant transfer from your checking account to your Trade Republic IBAN — fastest option, posting in under 10 seconds.
- Apple/Google Pay top-up directly in the app — for amounts up to €200, faster than SEPA.
- Securities sale from your portfolio — proceeds settle into the settlement account, clearing the overdraft, but may trigger additional capital gains tax.
If the negative balance persists for more than 60 days, Trade Republic can in rare cases freeze the portfolio for liquidation — extremely rare for retail investors given the small Vorabpauschale amounts.
Step by step: finding the Vorabpauschale in the Trade Republic app
- Open the app → tap Profile in the bottom right.
- Choose Activity → set the filter to Taxes.
- Tap the entry „Tax deduction — Vorabpauschale“ → detail breakdown appears.
- Under Tax certificate you’ll find the official PDF (available February/March 2027).
- Multiple ETFs: the detail page shows which ETF contributed which portion of the total Vorabpauschale.
You can change your Freistellungsauftrag any time under Profile → Taxes → Exemption Order. Note: Trade Republic does not share the €1,000 allowance with other brokers — you must split it manually across all your brokers.
Open a Trade Republic account
Free custody, €1 flat order fee, automatic Vorabpauschale processing. Account opening in 10 minutes via video identification — and full tax automation if you live in Germany.
Go to Trade Republic →Related topics
- Vorabpauschale 2026 — Complete Guide — mechanics, formula and examples for any broker.
- Legally Avoid the Vorabpauschale — 5 Strategies — how to reduce it to zero or near zero.
- Vorabpauschale at Scalable Capital — comparison guide.
Frequently Asked Questions
Does Trade Republic provide a tax certificate?
Yes. Trade Republic issues an annual KAP-compliant German tax certificate. It appears in February/March in the app under Profile → Taxes → Tax Certificate. You only need it if you file the German tax return with Annex KAP — for many users with a fully used Freistellungsauftrag, it’s not required.
What if I haven’t set up a Freistellungsauftrag?
Trade Republic remits the full tax on the Vorabpauschale to the Finanzamt without exemption. You can recover the overpaid tax via Annex KAP — but only once a year and with effort. Better: set up the Freistellungsauftrag before year-end.
Can I postpone the Vorabpauschale posting?
No. Trade Republic is legally required to remit the tax „without delay“ after the year-end. Deferral is not possible.
Does the Vorabpauschale apply to crypto held at Trade Republic?
No. Crypto holdings at Trade Republic are not treated as investment funds — the Vorabpauschale only applies to ETFs and investment funds. Crypto gains are taxed under § 23 EStG (private sale transactions) with a 1-year speculation period.
What if I sell the ETF in December and buy it back in January?
Then you have no holding on January 1 → no Vorabpauschale for the following year. But: the sale immediately triggers capital gains tax on any unrealized gains. This strategy only works in loss years or if you have unused Freistellungsauftrag — see 5 strategies.
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