In Germany securities are subject to their own taxation. This is regulated in §§ 20 and 32d EStG. Income tax law indicates here the individual capital income and determines when the separate tax rate of 25% (withholding tax) applies. We provide an overview of the individual regulations and applicable exceptions, for example the so-called Parts Income Procedure.
Principle 1: Securities and their taxation under the EStG
According to § 32d (1) EStG, the tax on income from capital assets that are not part of an operating asset is uniformly 25 %. In addition, there is a solidarity surcharge and, if necessary, church tax, whereby the “solo” results in an effective securities tax of 26.375 %.
The separate withholding tax rate includes all income from capital assets with the exception of the events mentioned in § 32d paragraph 2 EStG. If a taxpayer applies for the favourable examination pursuant to § 32d(6) EStG in the assessment procedure, the tax burden may be reduced. The favourable examination is always in favour of the shareholder if the tariff rate rate (§ 32a EStG) is less than 25 %.
Note: The favourable examination is an exclusively favourable requirement. In other words, there is no increase in the tax burden to more than 25%.
According to § 20 paragraph 8 EStG, income from capital assets is to be allocated to other types of income insofar as they belong to these. This applies, for example, to shares in corporations which become assets of the holding company in the course of a business split.
Securities: taxation of current income on capital assets
In § 20 (1) EStG, the legislature regulates the taxation of current income from capital assets. They are to be distinguished from the capital gains in § 20 paragraph 2 EStG and include the following services and payments:
This article does not replace tax or legal advice in an individual case. Facts, current law, jurisdiction, documentation and implementation remain decisive.