Capital-gains tax & partial exemption (InvStG 2018)
TaxesIn Germany, investment income is taxed with the flat withholding tax (Abgeltungsteuer, "KeSt") of 25% plus a 5.5% solidarity surcharge – without church tax, that gives a total rate of 26.375%.
The Investment Tax Act 2018 (InvStG) grants fund investors a partial exemption (Teilfreistellung): part of the fund income remains tax-free to offset the tax already paid at fund level.
If you are liable for church tax, the capital-gains tax rate is slightly reduced by a formula under §32d(1) sentence 4 EStG (`KeSt = 0.25 / (1 + 0.25 × church-tax rate)`), so that capital-gains tax + church tax together come out slightly lower than simply adding them. The total rate is still higher: 8% church tax → ~27.82% · 9% church tax → ~27.99%.
Partial exemption rates:Equity ETF / equity fund (≥51% stocks): 30% tax-free · mixed fund (25–50% stocks): 15% · German real-estate fund (≥51% property): 60% · foreign real-estate fund (≥51% property): 80% · other / individual stocks / bonds: 0%
Example (equity ETF, €50,000 gain, no church tax):Taxable gain = 50,000 × (1 − 30%) = €35,000 · tax = 35,000 × 26.375% ≈ €9,231