What role does the church tax play in the taxation of capital gains?
December 21, 2023 | 40,00 EUR | answered by Anna Karpinski
Dear tax advisor,
My name is Wilhelm Ratzberg and I have a question regarding the taxation of capital gains. In my portfolio, I have various securities from which I regularly generate income. I have noticed that in addition to income tax, church tax also needs to be paid.
My question is, what role does church tax play in the taxation of capital gains? I know that church tax is dependent on income tax and that it is only levied on income and wage tax. But how exactly is church tax calculated on capital gains? Are there any special considerations or exceptions that I need to be aware of?
I am concerned that I may be making errors in calculating church tax and may have to make additional payments as a result. Therefore, it is very important to me to receive a detailed explanation and possible solutions from you. Can church tax be reduced, for example, through donations or other tax measures?
Thank you in advance for your help and support.
Kind regards,
Wilhelm Ratzberg
Dear Mr. Ratzberg,
thank you for your question regarding the taxation of capital gains and the role of church tax. It is important to be aware that church tax is an additional tax levied on income and wage tax, and therefore also on capital gains.
In Germany, church tax is paid by members of the Protestant and Catholic churches. The church tax rate is usually 8 or 9 percent of the income tax, depending on the federal state. This means that even on capital gains subject to income tax, church tax must be calculated and paid accordingly.
There are no special or specific regulations for calculating church tax on capital gains. Church tax is calculated on the total income tax to be paid and is usually 8 or 9 percent of it. It is important to include the amount of capital gains in the income tax return so that church tax can be calculated correctly.
However, there are ways to reduce church tax. One option, for example, is to make donations to church or charitable organizations. These donations can be tax deductible, leading to a reduction in income tax to be paid, and therefore also church tax. It is worthwhile to consider donations as a tax measure to reduce the burden of church tax.
It is advisable to seek assistance from a tax advisor when calculating church tax on capital gains to avoid possible errors and ensure the correct payment of taxes. I am happy to assist you with any further questions and information.
Best regards,
Anna Karpinski
