3

In Germany, 801 Euros are exempt from the capital gains tax ("Sparer-Pauschbetrag"). There is a small tax on unrealized gains ("Vorabpauschale") but it is afaik negligible right now, and few of my investments pay dividends.

What isn't clear to me is if the Sparer-Pauschbetrag will be applied retroactively. Say I invest 10K and after 10 years I sell for 15K. Would I be taxed on 5000-801=4199 Euros, or on 5000-(10*801)=0 Euros?

And if it's the former (which I assume), does that mean to take full advantage of the Sparer-Pauschbetrag, I'd need to sell 801 euros in gains each year? How would I go about calculating how much to sell? And could I re-invest immediately after selling, or would there be a downside to this?

1
  • 1
    Be aware that the Vorabpauschale only applies to ETFs and other funds, but not to single shares.
    – glglgl
    Dec 21 '21 at 10:39
4

The Sparerpauschbetrag does not accumulate. If you do not use it, you lose it at the end of the year. The Vorabpauschale is at zero right now due to zero interest rates, so we can ignore that right now.

How would I go about calculating how much to sell?

First compute how much you have actually left by subtracting all paid dividends. Then you need to know how much unrealized gains you have. Beware that selling is done in FIFO order, this can differ considerably from the "average buy in" typically shown by brokers.
For funds (not for direct investments in shares) there is also a Teilfreistellung (reduction of taxable gain) to compensate you from dividend leakage. The amount depends on the type of fund (equity, bond). I recommend using a tool to compute this

And could I re-invest immediately after selling, or would there be a downside to this?

So far there is no wash sales rule. You are free to buy back immediately. There is a minor downside in crossing the spread, e.g. a stock "trading at 100€" might actually be sold at 99.95€ and rebought at 100.05€. You will end up with less stocks than you started with. The spread varies considerably between stocks and especially execution time. Do not execute orders outside of standard trading hours.
Also do not forget brokerage costs

2
  • With many brokers, fees apply, when you buy shares. One has to think, if re-buying shares for maybe 500 EUR is worth the fees - just to make sure the money is not gifted to the state. Dec 21 '21 at 20:04
  • There are now plenty of low-cost brokers that trade for 1€ or similar. Even with 5€ per trade this should still be a good deal if one manages to turn 500€ of gains tax free
    – Manziel
    Dec 22 '21 at 7:49

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.