How are capital gains from stocks taxed?
May 28, 2023 | 50,00 EUR | answered by Dietrich Hohenadel
Dear tax consultant,
I have been investing more frequently in stocks lately and would like to learn more about the taxation of capital gains from stocks. I am unsure about how exactly these income are taxed and what taxes I have to pay on them.
To give you some background: I have purchased stocks in various companies and regularly earn capital gains in the form of dividends and price gains as a result. So far, I have not reported these income in my tax return, as I am unsure about how to correctly tax them.
My concerns are that I may be evading taxes or incorrectly declaring them, which could lead to legal consequences. Therefore, I would like to know how I can correctly tax my capital gains from stocks to avoid legal issues and ease my tax conscience.
My question to you is: How are capital gains from stocks taxed and what taxes do I have to pay on them? Are there any special regulations or exemptions that I should be aware of? And how can I correctly report my capital gains from stocks in my tax return to prevent potential legal consequences?
I look forward to your competent support and thank you in advance for your help.
Sincerely,
Wolfgang Klein
Dear Mr. Klein,
Thank you for your question regarding the taxation of capital gains from stocks. It is understandable that you are concerned about the correct taxation and want to avoid any legal consequences. I am happy to explain the tax treatment of capital gains from stocks to you and provide you with tips on how to correctly report them on your tax return.
In Germany, capital gains from stocks are subject to the capital gains tax. Currently, this tax is 25% plus solidarity surcharge and, if applicable, church tax. The capital gains tax is withheld directly by the bank or broker and paid to the tax office. Therefore, as an investor, you no longer need to report the capital gains in your income tax return, unless you are exempt from the capital gains tax or want to claim deductible expenses.
If you earn dividends or capital gains that exceed the annual tax-free allowances, you should check if you have submitted a tax exemption order to your bank or broker. This allows your capital gains to remain tax-free up to a certain amount. The tax-free allowance is currently 801 euros for singles and 1,602 euros for married couples.
If you need to report capital gains from stocks in your tax return, you should enter the corresponding income in the "Anlage KAP". This is where all income from capital assets that are not subject to the capital gains tax, such as interest from fixed-term accounts or foreign dividends, are listed. Don't forget to also report your losses, as they can be offset against profits.
To avoid potential errors in the taxation of capital gains, I recommend keeping all relevant documents safe and consulting a tax advisor if necessary. They can assist you in correctly reporting your capital gains in your tax return and inform you about possible tax-saving models.
I hope this information is helpful and answers your question regarding the taxation of capital gains from stocks. If you have any further questions, please feel free to contact me.
Best regards,
Dietrich Hohenadel
