Capital gains tax (Kapitalertragsteuer / Sparerpauschbetrag)
Capital gains tax is the tax Germany charges on profit from selling capital assets — stocks, ETFs, bonds — plus dividends and interest. The withholding mechanism is called Kapitalertragsteuer (capital gains tax at source): a flat 25% plus Solidaritätszuschlag (solidarity surcharge), with the first €1,000 per person exempt each year under the Sparerpauschbetrag (saver's allowance).
Why it matters
Most income in Germany is taxed on a progressive scale, but capital income runs on a separate, flat track — a percentage (see Percentages and shares) applied uniformly regardless of the recipient's income bracket. Anyone holding a Depot (brokerage account) meets this tax the moment the bank pays a dividend or a sale settles: it withholds automatically, before the money reaches the account. Understanding the flat-rate mechanism also sets up the harder case — equity compensation, where the same appreciation can split across two different tax regimes depending on when it happened.
Worked examples
1. Selling ETF shares at a profit. An investor sells ETF shares for a €1,500 gain in one tax year and has filed no other capital income. The Sparerpauschbetrag shields the first €1,000, leaving €500 taxable. Tax due: €500 x 25% = €125, plus Solidaritätszuschlag of 5.5% on that amount (€125 x 5.5% = €6.88), for a total of €131.88 — an effective rate of 26.375% on the taxable portion.
2. The allowance doubles for married couples. The Sparerpauschbetrag is per person, and spouses filing a joint Freistellungsauftrag (exemption order) combine their allowances.
| Filer status | Annual allowance | €3,000 profit — taxable amount | Tax at 26.375% |
|---|---|---|---|
| Single | €1,000 | €2,000 | €527.50 |
| Married, joint order | €2,000 | €1,000 | €263.75 |
The mechanism doesn't change between the two rows — only the size of the exempt slice does.
Don't confuse with
Equity compensation (RSUs and ESPPs) is not taxed under this flat regime at the point it's granted to an employee. When shares vest or are purchased at a discount through a workplace plan, the value received is treated as ordinary wage income — added to the salary, taxed at the employee's progressive income-tax rate (up to 45%), and run through payroll withholding, not the 25% flat rate. Capital gains tax only applies afterward, to the appreciation between that vesting or purchase price and whatever price the shares are eventually sold at. Confusing the two leads to under-withholding: an employee who assumes the whole gain sits under the 25% rate can badly underestimate the tax bill on the compensation portion.
Check yourself
A single filer sells ETF shares for a €1,500 profit in one tax year, with no other capital income and no Freistellungsauftrag exceptions. Using the €1,000 Sparerpauschbetrag allowance and the 25% Kapitalertragsteuer rate plus 5.5% Solidaritätszuschlag (26.375% combined), how much tax, in euros, is owed?
A married couple files a joint Freistellungsauftrag and has €3,000 in combined capital gains for the year. Which of these correctly describes the tax owed?
An employee's restricted stock units (RSUs) vest, and the shares are worth €10,000 at that moment. Six months later, she sells them for €12,000. How is this taxed?
Sources
- Einkommensteuergesetz (EStG) §20 Abs. 9 — Sparer-Pauschbetrag (€1,000 / €2,000 annual allowance, unchanged for 2026), Bundesministerium der Justiz, https://www.gesetze-im-internet.de/estg/__20.html (2026)
- Einkommensteuergesetz (EStG) §43a — Bemessung der Kapitalertragsteuer (25% flat rate plus 5.5% Solidaritätszuschlag on the tax), Bundesministerium der Justiz, https://www.gesetze-im-internet.de/estg/__43a.html (2026)