German Capital Gains Tax 2026 — 25 % + Soli + Church Tax
German capital gains tax is nominally 25 % — through solidarity surcharge and church tax it becomes effectively 26.375 % – 27.99 %. With a low personal tax rate, the favorability check can save money. Here's the complete guide.
How capital gains tax is calculated
Capital gains tax was introduced in 2009, replacing the old speculation period (1 year). It applies to all capital income: interest, dividends, price gains, option premiums. Nominal rate 25 %, effective with Soli & possibly church tax:
| Religion | Cap.G.Tax | + Soli (5.5 %) | + Church Tax | Effective |
|---|---|---|---|---|
| Non-religious | 25 % | +1.375 % | — | 26.375 % |
| Bavaria/BW (8 %) | 25 % | +1.375 % | +1.84 % | 27.82 % |
| Other states (9 %) | 25 % | +1.375 % | +2.07 % | 27.99 % |
How it works in practice
Bank/broker withholds capital gains tax automatically at payment flow and remits to the tax office — you see only the net amount in the settlement account. Source withholding usually makes Annex KAP unnecessary.
3 cases where Annex KAP is still needed
- Foreign brokers (IBKR US, eToro, Trading 212): no German bank → no automatic tax → KAP required
- Multiple brokers with unsplit savings allowance: KAP for correction
- Cross-broker loss offsetting: only via Annex KAP
- Favorability check (see below): voluntary — can be worthwhile
Favorability check (Günstigerprüfung) — when it pays off
The favorability check lets investors tax capital gains at their personal rate instead of the 25 % flat rate. Useful for: students, retirees, low-income individuals.
If your personal marginal tax rate is below 25 %, the favorability check is worth it. Example: student with €12,000 income + €2,000 dividends pays 25 % flat = €500. With favorability check her personal rate (≈ 14 %) → €280 tax → €220 saved.
FAQ — Capital Gains Tax
Is favorability check worth it for me?
If your taxable income is below ~€18,000 (single) or €36,000 (married) — likely yes. The tax office checks automatically in your favor when you check the box. No risk if it would be worse.
How does loss offsetting work in DE?
Two pots: stock loss pot (offsettable only against stock gains!) and general loss pot (interest, dividends, ETF sales). Losses carry forward unlimited. Different from AT — see comparison page.
What about US stocks with capital gains tax?
US withholds 15 % WHT (with W-8BEN). These 15 % are credited against capital gains tax in DE (Annex KAP line 37). Effective burden stays 26.375 % (no church tax) — not 26.375 % + 15 %.
Do I need to file taxes if I have only dividends?
Usually no — broker handles everything automatically. Required only at foreign-broker accounts, unused savings allowances across multiple banks, or carrying losses forward.
Can I avoid church tax?
Only by leaving the church (legally binding). Non-members pay no church tax. Mixed-religion couples are taxed proportionally.