What role does the flat tax play in the taxation of capital gains?
April 17, 2022 | 40,00 EUR | answered by Robert Kockel
Dear tax advisor,
My name is Ludwig Schulz and I am currently facing the challenge of correctly taxing my capital gains. I am unsure of the role of the flat tax in this context and how to properly declare my income.
Currently, I receive various capital gains such as interest, dividends, and capital gains from securities transactions. These incomes regularly flow into my account, but I am not sure if I have already paid the flat tax on them or if I still need to pay additional taxes.
My concern is that I do not want to make any false statements and I want to avoid unnecessary tax payments. Therefore, I would like to know from you what role the flat tax plays in the taxation of capital gains and if I may have overlooked or done something wrong.
Could you please explain to me how the flat tax works, which capital gains are affected by it, and how I need to correctly declare my income in the tax return to avoid potential errors?
Thank you in advance for your help and support.
Sincerely,
Ludwig Schulz
Dear Ludwig Schulz,
Thank you for your inquiry regarding the taxation of capital gains and the role of withholding tax. I can understand that you may feel unsure and want to avoid making any mistakes in your tax return. I am happy to explain to you in detail how withholding tax works and how you can correctly declare your capital gains.
Withholding tax is a flat tax imposed on certain capital gains such as interest, dividends, and capital gains from securities transactions. This tax is currently 25% plus solidarity surcharge and, if applicable, church tax. Withholding tax is withheld directly by banks or other financial institutions and remitted to the tax office. This means that as a taxpayer, you generally do not have to pay additional taxes on your capital gains if withholding tax has already been deducted.
It is important that you still report your capital gains in your tax return, even if withholding tax has already been deducted. This is to allow the tax office to verify the information and make any necessary corrections. In the attachment "KAP" of your tax return, you must declare all relevant capital gains, even if they have already been taxed. Additionally, you must claim any deductible expenses, such as custody fees or advisory costs, to minimize your tax burden.
If you are unsure whether withholding tax has already been deducted or if you may still owe additional taxes, I recommend carefully reviewing your bank statements and tax certificates. All deducted taxes should be listed there. If you still feel uncertain, you may also consider consulting a tax advisor who can assist you in correcting your tax return.
I hope that my explanations are helpful to you and that you can now correctly report your capital gains in your tax return. If you have any further questions, please feel free to contact me.
Best regards,
Robert Kockel
Tax Advisor
