Correctly classifying taxes on capital gains
With ETFs, it's not just the return that counts, but also what remains after taxes. The three terms that appear most frequently are saver's allowance, advance lump sum, and partial exemption.
Status: October 2026 — verified, not copied.
What remains after taxes determines your result
Three terms keep coming up for ETF investors in Germany: the saver's allowance, the advance lump sum, and the partial exemption. They sound technical, but have direct effects on your statement. Once you understand them, you make calmer decisions and avoid unnecessary tax deductions.
I am writing here from a personal perspective and not as tax advice. What I can offer is a classification of the basics — so that you ask the right questions in your brokerage account, in conversation with the bank, or with your tax advisor. I keep this page up to date when something reliable changes and indicate the status to which a statement refers.
Saver's allowance, advance lump sum, and partial exemption
Saver's allowance
AllowanceThe saver's allowance is a central concept in German capital gains tax. It reduces the tax burden on capital gains up to the allowance limit — up to that point, no capital gains tax is incurred. The amount differs for singles and married couples; married couples can use it via joint assessment. For it to be effective, you must file an exemption order with your custodian bank. Without this order, tax is deducted even if you remain below the limit.
Advance lump sum
annuallyFor accumulating funds, tax is incurred even before a sale — the advance lump sum. It is calculated annually and determined based on a base interest rate and the fund value. Simply put: The fund generates something during the year, and the state wants to see a small part of it taxed, even if you don't sell anything. The tax actually paid is credited upon later sale, so you don't pay twice. In years with weak performance, the advance lump sum can also be zero.
Partial exemption
proportionallyFor equity funds, a partial exemption applies in Germany. A portion of the earnings remains tax-free because the fund company has already paid taxes at the level of the held stocks. For private investors, this means: The taxable base is lower than the full return. The exact percentage depends on the fund type. This rule is one of the reasons why equity funds are treated differently for tax purposes than interest-bearing products — and it is one of the points that surprises many readers.
Distribute exemption order correctly
If you have multiple brokerage accounts, distribute your exemption order to the banks where you are most likely to exhaust it. A common mistake is to deposit the entire amount with one bank while earnings are already accruing at another.
You can change the order at any time — it costs nothing and usually takes a few minutes in online banking. Check at the beginning of the year whether the distribution still fits, especially if you opened or closed a brokerage account in the previous year.
The standard case: one bank, one deposited allowance, one annual statement. Here it is sufficient to enter the order correctly once.
Here it is worth splitting according to expected earnings: to where the distributions and interest actually accrue — not to where the account has been held the longest.
After a change, the old order is often still with the old bank. A quick look at both accounts in January prevents earnings from being taxed unnecessarily.
In January, it is decided whether the advance lump sum is a nuisance or a planned figure.
I look at the bank's statement once a year and write down here what shifts for my savings plans as a result. Market observations do not replace advice, but they make your own statement readable.
Tax traps that appear in everyday life
There are a few places where it gets expensive if you overlook them. None of it is a drama — but it's worth knowing beforehand what happens.
Account change without acquisition data
frequentlyIf the transfer of acquisition data is forgotten, the new bank will later calculate with an incorrect entry value. The error is usually only noticed upon sale and can then only be corrected with difficulty. When changing, it is worth confirming the transfer in writing.
Sale shortly before the turn of the year
timingAnyone who realizes profits in December to use the allowance can play into the advance lump sum of the following year. The effect is rarely large, but it exists — and it can be tracked with a note on your own statement.
Accumulating and distributing funds mixed
bothAnyone holding both fund types must keep two mechanisms in mind when billing: the annual advance lump sum for accumulators and the distributions that are taxed immediately. Both are manageable as long as you know what is on the statement.
Your own statement is the best benchmark — not the memory of a figure from the previous year.
When you should go to a tax advisor
For simple portfolios with broad ETFs and a filed exemption order, you can usually manage without additional help. However, as soon as multiple portfolios, inheritances, foreign connections, or self-employed income are involved, things quickly become confusing.
In such cases, tax advice is sensible. I am writing this generally on purpose because I cannot provide individual advice. What I can offer is a classification of the basic terms — so that you ask the right questions during the meeting and can classify the answers.
How small details add up over the years
An exemption order that is filed in time saves tax year after year that you would otherwise only get back via your tax return. An advance lump sum that you plan for prevents a surprise in January. And a portfolio transfer with correct acquisition data avoids errors that are difficult to correct.
Each of these points is small. Taken together, they make up a noticeable part of the result — and that is the real reason why I am dedicating a separate page to this topic.
What can change due to political shifts
Tax rules are not static. The saver's lump sum (Sparerpauschbetrag) has been adjusted in the past, and things can also change regarding the taxation of funds. For planning, this means: Do not rely on a number you learned years ago, but check the current status before you calculate.
I update the posts on this page when something reliable changes and indicate the status to which a statement refers. If you take a number from an older article, check it against the current version — not against your memory.
Questions I am asked most frequently about this topic
How does the saver's lump sum affect my return?
It lowers the tax on capital gains up to the exemption limit. This means more of what your portfolio earns stays with you. For it to be effective, an exemption order must be filed with the custodian bank.
What are the tax traps for ETFs in Germany?
Common points are a missing exemption order, a portfolio transfer without transferring the acquisition data, and the annual advance lump sum for accumulating funds. Anyone who knows these three avoids most surprises.
Do I have to file a tax return as a small investor?
Not necessarily, if the bank withholds and pays the capital gains tax. In certain cases, such as the favorable tax assessment (Günstigerprüfung) or foreign income, a return can still be useful. In case of doubt, clarify this with a tax advisor.
Where to read on
This page explains the basic terms. How you translate them into an ongoing savings plan is on the linked pages — and if your case becomes confusing, write me a short note about what it is about.
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This page is not tax advice — just an attempt to write down the terms as I would have explained them to myself.