General information on income from capital assets

We would like to inform you here in general terms about what falls within the scope of income from capital assets.

We would like to inform you here in general terms about what falls within the scope of income from capital assets, and how this is dealt with from a fiscal perspective. 

Yields from capital assets are taxed as income from capital assets. This income includes income from:

• transfer of capital assets (e.g. savings account interest, dividends)
• disposal of capital assets (“capital gains taxation”)
• derivatives
• cryptocurrencies

If a domestic custodian or paying entity (e.g. a bank) or a domestic debtor or service provider (mandatory from 2024) is involved, the income from the capital assets is taxed by way of tax deduction (capital gains tax [Kapitalertragsteuer, KESt]) by the respective entity. This means that as a rule this entity (e.g. the bank) is obligated to withhold the tax and pay it to the tax office. Depending on the type of income, taxation is either at a special tax rate of 25 % (for interest from savings accounts and giro accounts) or at a special tax rate of 27.5 % (all other capital income).

If and insofar as no deduction of the capital gains tax can be made due to lack of a domestic custodian or paying entity, e.g. in the case of savings account interest from a foreign bank, but also in the case of sale of GmbH shares, this income must be included into the tax return (assessment). However, even in this case taxation is isolated from the rest of the income at the respective special tax rate of 25 % or 27.5 %.

In addition, there is certain income from capital assets, such as profit shares from genuine silent partnerships, which must in any case be included into the tax return and are subject to the general income tariff.

Whether income from capital assets is subject to limited income tax liability depends on the type of the capital yields.