Do I have to pay taxes on my capital gains?
April 14, 2022 | 40,00 EUR | answered by Robert Kockel
Dear Tax Advisor,
My name is Paula Rüppel and I am currently unsure whether I have to pay taxes on my capital gains. I have recently started investing my money in various forms such as stocks, funds, and fixed deposits to increase my capital. Now I am wondering if I, as a private individual, have to pay taxes on the profits earned and how high these taxes could be.
So far, I have not submitted a tax return for capital gains as I am not sure if my capital assets are even taxable. I certainly do not want to commit tax evasion, but also do not want to pay unnecessarily high taxes if it is not necessary.
My concern is that I may have to pay back taxes and do not know how to correctly declare my capital gains. I am unsure if I also have to declare smaller profits from investments and how I should include the different forms of investment in my tax return.
Could you please explain to me whether and to what extent I have to pay taxes on my capital gains? Are there specific allowances or tax rates that I should consider? What documents do I need to correctly declare my capital gains? I would be very grateful for your assistance and clarification on this matter.
Sincerely,
Paula Rüppel
Dear Mrs. Rüppel,
Thank you for your inquiry regarding the taxation of capital gains. It is important to familiarize yourself with the tax regulations related to your capital investments in order to avoid potential issues with the tax authorities. I will be happy to explain to you in detail whether and to what extent you need to pay taxes on your capital gains.
In Germany, capital gains are generally subject to flat-rate withholding tax. This means that your earnings from interest, dividends, or capital gains are taxed at a fixed rate of 25% plus solidarity surcharge and, if applicable, church tax. This tax rate applies to all capital gains, regardless of the amount of the gains.
However, there are also exemption amounts that you can claim to keep your capital gains tax-free. The annual saver's allowance is €801 for singles and €1,602 for married couples. This means that you can receive capital gains tax-free up to this amount. If your earnings exceed this threshold, you will need to pay tax on the excess amount.
To report your capital gains in your tax return, you will need supporting documents such as bank statements, portfolio statements, or tax certificates from banks or fund companies. It is important to accurately record all earnings and report them in your tax return to avoid any issues with the tax authorities.
If you are unsure about how to properly tax your capital gains, I recommend seeking advice from an experienced tax advisor. A tax expert can assist you in preparing your tax return and ensure that all capital gains are properly declared.
I hope that this information has been helpful to you. If you have any further questions, please do not hesitate to contact me.
Best regards,
Robert Kockel, Tax Advisor
