In Germany is a new rule for taxing share based funds since 2018.

As far as I understand it, the following rules are now in place:

  1. One has to tax pay for fond distributions. One used to pay tax for the "distribution minus the foreign withholding tax". Now one just has to pay tax of 70% of the fond distributions. As far as I can tell, this is an improvment, because foreign withholding tax was something between 0-30%.

  2. If you sell fund shares you only need to pay taxed of 70% instead of the full 100%.

  3. If you don't get fund distributions and you don't sell your fund shares, (for example an undistributed fund) you have to pay a tax called "Vorabpauschale". When you sell fund shares the tax is reduced by all the tax you already payed for the "Vorabpauschale". So its not a new tax, its just a way of making you pay the tax before you sell the fund.

All blogs that I have read so far claim that this is in total neither less nor more tax for the average user. However when I look at it, I see that the tax just reduced by 30%, or do I oversee something important?

You must log in to answer this question.

Browse other questions tagged .