Germany
25 percent flat tax plus solidarity surcharge, a €1,000 annual allowance, 30 percent partial exemption for equity funds, and the annual advance lump-sum tax for accumulating funds.
Interest, dividends, and realized capital gains are taxed at 25 percent flat tax, plus a 5.5 percent solidarity surcharge on that tax. Together that's 26.375 percent, a bit more with church tax.
The annual allowance sits at €1,000 per person and €2,000 for jointly filing couples. Up to that amount, investment income stays tax-free if you've set up an exemption order with your bank. Without that order, tax gets withheld upfront regardless.
For equity funds and equity ETFs with at least 51 percent stock allocation, 30 percent of the income is tax-free, called a partial exemption. That works out to roughly 18.46 percent instead of 26.375 percent. For balanced funds it's 15 percent, for bond funds zero.
The advance lump-sum tax hits accumulating funds. It taxes a small notional gain annually, even without a sale. It's calculated as the fund's value at the start of the year times the base rate times 0.7, capped at the actual increase in value. With no increase, none is due. On eventual sale, whatever's already been taxed gets deducted.
For 2026, a base rate of 3.20 percent applies, capital gains tax plus solidarity surcharge of 26.375 percent, a partial exemption of 30 percent for equity ETFs producing an effective rate of 18.4625 percent on the income relevant to the advance lump sum where no exemption order applies; the annual allowance has stood at €1,000 since 2023, and church tax adds 8 or 9 percent on top of the capital gains tax.
The calculation runs in three steps: base return equals the fund's value at the start of the year times 0.70 times the base rate; the advance lump sum equals the smaller of the base return and the actual increase in value; taxable is that amount minus the pro-rata exemption order. Tax on a given year's advance lump sum gets debited early in the following year; with no increase in value, no advance lump sum is due.
The partial exemption is 30 percent for equity funds with at least 51 percent stock allocation, 15 percent for balanced funds between 25 and 50 percent, zero for bond funds, 60 percent for real estate funds holding domestic property, and 80 percent for those holding foreign property. There's no tax-free holding period, except for legacy holdings from before 2009. At a domestic broker, the bank withholds the tax automatically; at a foreign broker, the reporting obligation falls entirely on the investor.
| Germany | Austria | Switzerland | Belgium | France | Italy | Spain | Netherlands | |
|---|---|---|---|---|---|---|---|---|
| Rate on capital gains | 26.375% | 27.5% | 0% for private investors | 10% | 31.4% (flat tax) | 26%, crypto 33% | 19–30% progressive | 36% on assumed return |
| Annual allowance | €1,000 | none | not applicable | €10,000 | none | none | none | €59,357 of net worth |
| Partial exemption | 30% for equity funds | none | not applicable | none | none | none | none | not applicable, different system |
| Holding period | none | none | not applicable | none | none | none | none | not applicable, different system |
| Annual pre-taxation | advance lump sum | deemed-distribution income | none | none | none | none | none | yes, on total net worth |
| Dividends | same as capital gains | same as capital gains | as income | 30% withholding tax | same as capital gains | same as capital gains (26%) | same as capital gains | included in assumed return |
| Notable point | exemption order required | choose a tax-simple broker | trading as a business voids the tax exemption | transaction tax per trade | PEA and life insurance wrappers have special rules | 0.2% extra levy with a foreign broker | savings-income bracket is nationwide | taxed regardless of sale |
Germany
Austria
Switzerland
Belgium
France
Italy
Spain
Netherlands
Summary
- 26.375 percent excluding church tax, roughly 18.46 percent effective for equity ETFs.
- Set up an exemption order, or tax gets withheld despite the allowance.
- With foreign brokers, you have to report everything yourself.
Did you get it?
What's the effective tax rate on an equity ETF?
Roughly 18.46 percent, since the partial exemption makes only 70 percent of the income taxable.
When is no advance lump sum due?
When the fund had no increase in value that year.
What changes with a foreign broker?
There's no automatic tax withholding; the reporting obligation falls entirely on you.
Sources and further reading
- Base rate for 2026 per the announcement of the Federal Ministry of Finance, 13 January 2026 View source ↗
- German Investment Tax Act on partial exemption and the advance lump sum
Related
- AustriaTaxes by Country
- ItalyTaxes by Country
- SwitzerlandTaxes by Country