Withholding tax

Savers who invest their money in bank deposits, shares, bonds, funds, or certificates must pay the final withholding tax. Since 2009, the final withholding tax has been levied on interest, dividends, and realized capital gains, so-called capital income. The final withholding tax amounts to a flat rate of 25 percent plus the solidarity surcharge. In Germany, the bank automatically pays investment income taxes to the tax office, thereby settling the corresponding tax liability. For this reason, this tax is referred to as the final withholding tax. If the taxes are no longer paid automatically, it is referred to as capital gains tax.