The Right Results of the Wage Tax



As with wage tax, capital gains tax is a form of collection of income tax and corporation tax. Similar to wage tax, it arises with the inflow of investment income. With tax return calculator you can come up with the best calculations of the same.

Difference with capital gains tax and withholding tax

The capital gains tax plays a particularly important role for savers and investors, as this income is subject to income tax in almost all European countries.

What is capital gains tax

Investment income is understood to mean profits from investments. These include:

  • Interest from savings book, current account, etc.
  • Dividends, e.g. from stocks
  • Income from certificates for commodities or funds
  • Gains in value from the sale of stocks when a stock was bought cheaply and sold more expensively

Any profit made on such capital gains is taxed. Since the capital gains tax is a so-called withholding tax, it is withheld directly by the paying agency, such as a bank or insurance company, for the recipient and passed on to the relevant tax authority. Different percentage discounts apply to the various investment income the tax rate for dividends is 20 percent, for interest from investments 30 percent and for anonymous over the counter transactions 35 percent. In addition, there is a solidarity surcharge of 5.5 percent and, if applicable, church tax of 8 or 9 percent.

Income from:

  • Other loan agreements from a non-credit institution (e.g. company and private loans)
  • Interest from mortgages as well as land and annuities from pension debts
  • A capital life insurance policy or sale of a silent partnership

Foreign currency transactions

Even if this income is not subject to capital gains tax, it does not mean that it is tax-free: you must declare this capital income in your tax return.

Difference with capital gains tax and withholding tax

The terms capital gains tax and final withholding tax are usually used synonymously. However, capital gains tax is only one form of withholding tax. This was introduced in Germany on January 1, 2009 and replaces the previous taxation of capital income. The reason for the introduction was that a competitive tax rate for investment income was to be created for international competition.


Before the introduction, gains from investments were either taxed as capital gains tax and interest withholding tax (plus solidarity deduction and church tax) or were stated in the tax return at the normal income tax rate. Since 2009, the investment income no longer has to be stated in the tax return, as they are settled with the final withholding tax, according to the name. The various types of income taxed via capital gains tax always had to be listed individually in the tax return.

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