Vorabpauschale for MSCI World ETFs 2026 — iShares vs Vanguard vs Xtrackers
Three of the most popular world-equity ETFs side-by-side for the German Vorabpauschale: iShares Core MSCI World (IE00B4L5Y983), Vanguard FTSE Developed World (IE00BKX55T58 — Vanguard’s direct MSCI-World cousin, since Vanguard tracks FTSE indices) and Xtrackers MSCI World (IE00BJ0KDQ92). All three are accumulating, all three are subject to the same 2026 Vorabpauschale formula — and yet there are micro-differences in tax burden. Here are the numbers. Applies to investors with German tax residency.
Bundesbank base interest rate 2026: 2.29%. The 0.7 reduction yields 1.603% of the fund value as base income — capped at the actual annual gain. Equity ETFs then get the 30% partial exemption.
Direct Comparison of the Three ETFs
| Feature | iShares Core MSCI World | Vanguard FTSE Developed | Xtrackers MSCI World |
|---|---|---|---|
| ISIN | IE00B4L5Y983 | IE00BKX55T58 | IE00BJ0KDQ92 |
| Index | MSCI World | FTSE Developed All-Cap | MSCI World |
| AUM | ~80 bn EUR | ~17 bn EUR | ~12 bn EUR |
| TER | 0.20% | 0.12% | 0.19% |
| Distribution type | accumulating | accumulating | accumulating |
| Replication | physical optimized | physical full-rep | physical full-rep |
| Partial exemption | 30% (equity ETF) | 30% (equity ETF) | 30% (equity ETF) |
Note: Vanguard tracks FTSE indices instead of MSCI — the FTSE Developed All-Cap universe of ~3,900 stocks is somewhat broader than MSCI World (~1,500). Tax-wise: zero difference, both qualify as equity ETFs with 30% partial exemption.
Vorabpauschale 2026 — Concrete Numbers per ETF
Assumption: 50,000 € held in each ETF on Jan 1, 2026. Expected 2026 gain: +6% (3,000 €).
These 147.98 € apply identically to all three ETFs — iShares, Vanguard, Xtrackers. The Vorabpauschale mechanism is provider-independent. What differs: TER (running cost), tracking difference, liquidity, fund size — not the tax.
When Does the ETF Choice Make a Tax Difference?
Three scenarios where iShares vs Vanguard vs Xtrackers becomes tax-relevant:
- Tracking difference — iShares typically beats the index by 0.02 – 0.05%, Vanguard ~0.00%, Xtrackers ~0.07% below. Over 20 years this compounds to 1 – 2% of final capital.
- Withholding-tax efficiency — all three Irish UCITS funds enjoy DTA benefits. Tax-wise effectively equal.
- Distributing variant: iShares MSCI World Distributing (IE00B0M62Q58) yields ~1.8% — covers tax-free allowance, has near-zero VP.
- Provider branding — the iShares brand costs no extra tax.
- Replication method — physical optimized vs full-rep: no tax difference.
- Fund domicile — all three in Ireland, all 30% partial exemption.
What Happens When Switching Between the Three?
Switching from one MSCI World ETF to another (e.g. iShares → Vanguard) counts as a sale + new purchase. Consequences:
Example: switching 100,000 € from iShares (TER 0.20%) to Vanguard (TER 0.12%) saves 0.08% = 80 €/year. With 30,000 € unrealized gain, the switch costs 30,000 × 70% × 26.375% = ~5,540 € tax. Break-even: 69 years of holding. Rarely worth it.
Related Topics
- Vorabpauschale 2026 — Complete Guide
- Vorabpauschale FTSE All-World — Vanguard VWCE in detail.
- VP for multiple ETFs
- Partial exemption 30%
- Tax Calculator
FAQ
Which MSCI World ETF has the lowest Vorabpauschale?
None. The Vorabpauschale depends only on the fund value on Jan 1, not on the provider. With identical value, iShares, Vanguard, and Xtrackers pay the exact same VP.
Does TER affect the Vorabpauschale?
Indirectly: a lower TER lets the ETF grow slightly more — in 10 years, the VP base on Jan 1 will be marginally higher. Practical effect: negligible.
What’s the difference between MSCI World and FTSE Developed All-Cap?
FTSE Developed All-Cap (Vanguard) holds ~3,900 stocks including small caps; MSCI World (iShares, Xtrackers) holds ~1,500 large + mid caps. Historical performance difference < 0.3% p.a. Tax-wise identical.
iShares Core MSCI World uses optimized replication — is that a tax disadvantage?
No, not tax-wise. Optimized replication can lead to smaller tracking differences, but that is a performance topic, not a tax topic. Vorabpauschale and partial exemption are identical.
Should I pick distributing or accumulating?
For Vorabpauschale, the distributing variant is usually cheaper — it often has 0 € VP because the distribution already covers the base income. For long-term compounding, accumulating wins. Detailed comparison here.
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