Do I have declare dividends on ETFs that accumulate them?

27 posts in this topic

Picking up on this topic again, just trying to see if I understood all I read (here and in other topics) on taxes after 1.1.2018. I Marked my assumptions with "(?)" - would be happy to get feedback on those.

 

First of all, assuming that I have just one account where I invest (world wide) I understand that I'm exempt from 1602EUR of profit per year (as I'm married). (?)


I don't need to pay taxes on dividends accumulated in ETFs I invest in, and for everything above 1602 I should pay 25%+5.5% when I sell it, and some advance (sum * 0.7% * 1.1%) if I just keep it and don't sell. (?)

 

If I use a German bank/broker they will deduct everything automatically. If I understand correctly I would need to file a "Freistellungsauftrag" to make sure they exempt me from the first 1602E of my profit. (?)
However these platforms are all in German and quite inconvenient for me.

 

If I use a platform like Degiro - they don't deduct any tax themselves? I'm not sure about dividend tax as they write "DEGIRO ist verpflichtet die Quellensteuer auf Dividenden einzubehalten. Die verschiedenen Steuersätze hängen von dem Land ab, aus welchem die Aktie stammt. Dies wird jedoch in der Jahresübersicht vollständig dokumentiert." 

 

but regardless of the dividend tax, they only send me a yearly report which I should use in my yearly tax return. https://www.degiro.de/helpcenter/faq/steuern/907 (?) 

 

 

Now does it matter if I invest in ETFs that are traded in the German stock market or (for example) a Dutch stock market? 
I was told I'd better keep away from non-EU stock markets (also away from UK) so I don't end up paying or owing taxes twice (here in Germany and in the other stock exchange country). But is there a chance of double taxation on EU stock markets?

 

Thanks, I appreciate any correction to my assumptions and any feedback!

1

Share this post


Link to post
Share on other sites

At first glance it looks horrendous to calculate these things if you hold them outside a German provider.

 

I assume if you leave Germany you can't get back the advance capital gains payments you've made? (and will probably end up paying capital gains again in a different country)

 

What do I need to take to my tax advisor to calculate the tax for a year? Value at start of year (in Euros I assume), value at end of year, any payments made - is that right?

 

Also, are UK investment trusts covered by this? How about shares in ordinary companies?

 

Thanks for any answers!

0

Share this post


Link to post
Share on other sites
29 minutes ago, xioxox said:

I assume if you leave Germany you can't get back the advance capital gains payments you've made? 

 

What are you paying advance capital gains tax on?  (If you mean share disposals at the start of a year that may be mitigated by losses later, you should at least set up the taxfree allowance to be assigned to your depot probably, then at least tax is not automatically deducted).

 

Yes your foreign income (like dividends) and capital gains (on disposal) is taxed here.  Any tax deducted in the UK etc would be offset.    German tax reporting covers our worldwide income.  

0

Share this post


Link to post
Share on other sites
59 minutes ago, swimmer said:

 

What are you paying advance capital gains tax on?  (If you mean share disposals at the start of a year that may be mitigated by losses later, you should at least set up the taxfree allowance to be assigned to your depot probably, then at least tax is not automatically deducted).

 

Yes your foreign income (like dividends) and capital gains (on disposal) is taxed here.  Any tax deducted in the UK etc would be offset.    German tax reporting covers our worldwide income.  

 

Am I misunderstanding the "Basisertrag" and "Wertsteigerung" which goes into the "Vorabpauschale" which is talked about here: https://www.finanztip.de/indexfonds-etf/investmentsteuerreformgesetz/? Isn't this some sort of advance capital gain which is deducted from the amount when sold?

0

Share this post


Link to post
Share on other sites

That's not quite an answer to the question - just a list of the principles and some generic tips.  The article seems to note that it's not highly relevant to the typical private investor for a range of reasons and that's probably most of us.   It definitely seems to make the point about applying your taxfree allowance to your funds if possible, though. Quite a few times.  (Many of us use depots and so the calculations are all done for us - at least we get something for our admin fees).

 

That might be what you ask your advisor first.  Is it relevant to your specific situation and asset holdings and value etc?  

0

Share this post


Link to post
Share on other sites

Vorabpauschale. I'm reading forums and German tax articles and can't figure out what I do with my reinvesting funds held in an abroad depot.

 

What info do I need to put where? I don't know how much the fund made and reinvested over the year. If the fund lost money, do I still pay the Vorabpauschale? 

 

Do I simple put the value at the beginning and end of the year? What if I bought more during the year?

 

Soo complicated, I feel helpless and going to a Steuerberater / verein would eat up the winnings :(

0

Share this post


Link to post
Share on other sites
On 3/24/2019, 11:17:58, Rymdmannen said:

Vorabpauschale. I'm reading forums and German tax articles and can't figure out what I do with my reinvesting funds held in an abroad depot.

 

What info do I need to put where? I don't know how much the fund made and reinvested over the year. If the fund lost money, do I still pay the Vorabpauschale? 

 

Do I simple put the value at the beginning and end of the year? What if I bought more during the year?

 

Soo complicated, I feel helpless and going to a Steuerberater / verein would eat up the winnings :(

I am also so confused with this. I  cant get relevant information.

 

For i.e. on degiro I can buy vanguard index fund on EAM which is Amsterdam exchange and xetra which is german. Is there any difference between this when I am decalring my taxes.

 

Also if somebody can answer. EXAMPLE 1:

On the first january 2020 for i.e. I buy 10 000 eur of xxx index fund. This fund gives me 200 eur in dividends until 31.Dec 2020. And this fund also increase in price to 11000 eur. by the 31. Dec 2020.

What taxes  I pay in this case ? Do I pay taxes only on 200 dividends which is in this case less than 801 eur tax free amount. So I dont pay taxes at all.

And what about 1000 increase in price? Do I pay taxes on that even if it is not sold ?

 

 

 

0

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!


Register a new account

Sign in

Already have an account? Sign in here.


Sign In Now