Advance lump sum (Vorabpauschale, §18 InvStG)
TaxesThe advance lump sum (Vorabpauschale) is an annual minimum taxation for accumulating (non-distributing) investment funds. Because accumulating ETFs make no distributions, the tax would otherwise only be due on sale – the advance lump sum ensures annual taxation in advance.
It is calculated as: redemption price at the start of the year × base interest rate × 70% – but at most the actual increase in value during the year. If prices fall or rise only slightly, the advance lump sum is often zero or very small.
How it reduces deferred tax:You already pay capital-gains tax on the advance lump sum (on an ongoing basis). When you later sell, this already-taxed amount must not be taxed again – so it reduces the outstanding tax burden.
Two input modes in FireLotse:Tax paid: you enter the capital-gains tax already paid on advance lump sums (from your annual tax certificate). It is deducted directly from the calculated tax liability. · Gross advance lump sum: you enter the reported advance lump-sum amount (before partial exemption). FireLotse deducts it from the gain before the partial exemption is applied.