Tax returns for investors

How and where can you save taxes as an investor? When should you file a tax return and when can you do without it? In the case of capital income, you can benefit from some regulations.

Capital gains are the profits from your investments. These include, for example, price gains when selling shares, ETFs (German) , interest from the savings account or dividends from shares or GmbH shares.

As the owner or investor, you have had to pay a withholding tax (or capital gains tax) for this capital gains since 2009.

When selling shares, the special feature is that the tax applies to shares that you bought from 2009 onwards. The following applies to investment shares that you bought before 2009: The changes in value of these so-called grandfathered old shares between January 1, 2009 and December 31, 2017 are tax-free. Changes in value that have taken place from January 1, 2018 are taxable if the profit from their sale exceeds 100,000 euros.

ETFs (“exchange-traded funds”) in particular are becoming increasingly popular and are often used for long-term savings. They offer a comparatively  inexpensive  type of investment and usually promise interesting returns. But trading in individual titles, i.e. shares, is also flourishing. Reasons include the low return on fixed-income investments and the spread of apps for private investing. 

More on the taxation of ETFs (German)  can be found in our guide.

The withholding tax introduced in 2009 has significantly simplified tax returns for investors. It affects everyone who has invested their money in stocks, bonds, bank deposits, funds (including ETFs) or certificates. Do you receive capital income from such investments, e.g. B. interest, dividends or realized price gains, the bank you commission pays 25 percent plus the solidarity surcharge and, if applicable, church tax directly to the tax office.  

This uniform, direct taxation makes the KAP form of the tax return unnecessary for the time being.

Use the Taxfix withholding tax calculator to find out how much withholding tax you have to pay on your capital transactions. You have the option of filling in the fields freely and specifying your exemption order deposited with the bank. Just try it!

With the savings allowance, every taxpayer is entitled to an allowance: single people are entitled to an amount of 1,000 euros per year, spouses are entitled to 2,000 euros together. This also applies to the capital income that runs through the accounts of children who are keen to invest.     

In order to be able to benefit from this, you have to give your bank a so-called exemption order. The bank only deducts the final withholding tax when the profits exceed this savings allowance. Every bank through which you have invested money needs an exemption order from you (also for several accounts or custody accounts).

If you have paid too much final withholding tax, for example because your savings allowance was not divided up optimally or because you forgot to state the exemption order, you should definitely submit a tax return in order to get back the taxes you paid too much.  

Another reason to submit a tax return is the so-called favorable test. This is particularly useful for students (German) , pensioners (German) , children or low-income workers.

In these cases, the tax office will check whether you have paid too much withholding tax and will refund you the difference in such cases.

Your personal tax rate is decisive for this: If this is below the flat rate withholding tax of 25 percent , you pay less tax . To do this, you state all capital gains and attach the tax certificates from the banks.

As a low-income earner, you can apply for non-assessment. If your annual income  is less than basic allowance (German) are usually also exempt from withholding tax.

If approved, the non-assessment is valid for three years and must be presented to the bank - so you receive the full untaxed investment income.

As an investor, you have other ways of saving taxes. So you can deduct the transaction costs for your banking transactions.    

These include, for example, the

• fees
• bank charges
• Broker commissions
• Wealth management costs
• Expenditure on banking advice

If your expenses are billed at a flat rate, you can set 50 percent of these costs. You can offset this against your winnings. If you make your capital investments with only one bank, this happens automatically.    

In the event that your investments are spread across several banks, a tax return makes sense to show the tax office possible losses. 

As you have already read, Taxfix is ​​very different from the classic ELSTER (German)  online service from the tax office. Investors who do their tax returns with ELSTER have to fill out complex forms that are often not easy to understand.

The questions of Taxfix app  are intuitive, simply formulated and each offer an explanation box, should you ever get stuck. In addition, at ELSTER you usually have to fill out several forms, whereas at Taxfix you can complete the question-and-answer process in one go. Meanwhile, you can switch from smartphone to app and back - your data is constantly synchronized.

We also suggest deductible expenses that you might not have thought of. Combined with the plausibility check for your entries, there is practically nothing standing in the way of your tax refund. And best of all: You completed the flow of questions in less than half an hour on average!