Typically, capital gains tax is paid upon realizing a profit—meaning when securities are sold. Consequently, some novice investors are surprised by account withdrawals despite not selling any shares. These transactions appear in January or, in some cases, February. Timo Halbe from the Finanztip portal explained: “Depository operators calculated the advance tax and debited it from accounts.”
Why the ETF Advance Tax Exists
The core idea is to ensure that taxes are paid regularly, similar to fixed-income investments. Since ETFs are often used for retirement planning, they may be held for decades, accumulating significant growth that would otherwise remain untaxed for a long period. Therefore, the state requires an annual prepayment. When the fund is eventually sold, these advance payments are deducted from the final capital gains tax total.
Why the Advance Tax Has Increased
A crucial factor in the calculation is the so-called base interest rate. The German Ministry of Finance sets this based on government bond yields. Because these yields rose last year, the base rate increased as well. For the 2024 tax year, it was 2.29%, and for 2025, it has been set at 2.53%.
How the Calculation is Performed
Five figures are required to calculate the advance tax:
- The fund’s value at the beginning of the year.
- The fund’s value at the end of the year.
- The fund type (equity or mixed).
- The amount of distributed profits or dividends.
Calculation Example: An investor holds a fund valued at 10,000 euros on January 1, 2025. By December 31, the portfolio value is 10,700 euros, and 100 euros in profit was paid out during the year. First, the initial value is multiplied by 70% of the base rate, and then distributions are subtracted:
10.000 x 2,53 % x 70% – 100 = 77,10 Euro
This is the maximum base for the advance payment. If the actual value increase in 2025 was less than this figure, that lower amount is used for further steps.
Determining the Final Amount Payable
The 77.10 euros is merely the calculation base, not the final tax bill. The end payment depends on the fund type. For equity funds, an additional 30% can be deducted (partial exemption); for mixed funds, 15%.
Calculation for a pure equity fund:
77.10 (advance lump sum) x 70% (equity fund) x 26.38% (tax rate without church tax) = 14.24 euros
When Tax is Not Levied
This calculation applies only if the value of the securities has increased. If the price fell, no withdrawals occur in January. Tax is also not paid if the dividends received (and already taxed) exceed the capital gains.
Recommendation: Maintain an Account Balance
Banks calculate and debit the tax automatically from the settlement account. It is essential to have sufficient funds available. It is recommended to keep a balance of 15 to 50 euros for every 10,000 euros invested in ETFs. Otherwise, the bank may charge overdraft interest or notify the tax office of the inability to process the payment.
Source: BR24
Latest Posts
