How do different investment strategies affect the taxation of capital gains?
November 14, 2022 | 40,00 EUR | answered by Anna Karpinski
Dear Mr. Bittner,
I have been trying to increase my capital for some time now and have experimented with various investment strategies. I have noticed that the taxation of capital gains can vary depending on the investment strategy.
Currently, I mainly invest in stocks and funds, focusing on both dividends and capital gains. However, I am concerned that I may have to pay too much tax and wonder if there is a better investment strategy that is more tax-efficient.
I have heard that there are tax-optimized investment products, which allow you to minimize the tax burden. How exactly does this work and which investment strategies are particularly effective in reducing tax liability?
I am also interested in how the capital gains tax affects my investment returns and whether there are ways to avoid or minimize it. Are there legal ways to reduce the tax burden without violating the law?
I would greatly appreciate it if you could help me by explaining the effects of different investment strategies on the taxation of capital gains and providing possible solutions.
Thank you in advance for your assistance.
Sincerely,
Max Bittner
Dear Mr. Bittner,
Thank you for your inquiry regarding the taxation of capital gains and possible tax-optimized investment strategies. It is very important to address this issue in order to minimize the tax burden and get more out of your capital.
First of all, it is important to know that capital gains in Germany are generally subject to flat-rate withholding tax. This means that capital gains such as interest, dividends, and capital gains are taxed at a flat rate of 25% plus solidarity surcharge and, if applicable, church tax. This tax is deducted directly by the bank or broker when the capital gains occur.
To reduce the tax burden, there are various legal structuring options. One option is to invest in tax-optimized investment products. These offer the opportunity to minimize the tax burden by, for example, only part of the profits being taxable or the profits being able to be deferred. It is important to seek advice from a tax advisor to find the optimal products for your individual situation.
Furthermore, you can reduce the tax burden through targeted investment strategies. For example, you can invest in tax-optimized funds designed to minimize the tax burden. Utilizing tax exemptions and loss offset possibilities can also help reduce the tax burden.
However, it is important to note that tax evasion or illegal structuring will be prosecuted criminally. Therefore, it is advisable to adhere to applicable laws and use legal ways to optimize taxes.
I hope that I have been able to help you with this information. If you have any further questions or would like personal advice, I am at your disposal.
Best regards,
Anna Karpinski
