Saver's Allowance: Who Qualifies and What You Get
Learn how to use the Saver's Allowance to protect your capital gains from being taxed in Germany.
The Saver's Allowance is a tax rule in Germany that allows you to earn a certain amount of profit from your investments without paying tax on it.
Who it's for
This is for anyone who is a tax resident in Germany and earns money from capital gains, such as interest or investment profits.
What you get
You receive a tax-free limit on your investment income. Individuals can earn up to €1,000 in gains without being taxed, while married couples can claim up to €2,000.
What it costs you
There is no direct monetary cost, but you must take the step of filing a Freistellungsauftrag (an exemption order) with your bank to ensure they do not automatically deduct the tax.
The catch to know
If you hold bank accounts or investment accounts at more than one bank, you must manually split your allowance between them. If you do not tell each bank exactly how much of your total allowance to use, you may accidentally exceed your limit and end up paying more tax than necessary.
How to apply
- Determine your total allowance based on whether you are filing individually or as a married couple.
- Contact your bank or log into your online banking portal.
- Submit a Freistellungsauftrag to specify how much of your allowance should be applied to that specific account.
- Repeat this for any other banks where you hold investment assets.