German funds – rates, eligibility, availability of relief etc. (CBL)
Capital Income Tax
| Standard tax rate: | 0% / 26.375% a | Trading restriction: | Yes |
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a. No capital income tax (Kapitalertragsteuer; KESt) and solidarity surcharge (Solidaritätszuschlag; SolZ) are deducted by Clearstream Banking for fund distributions of German funds, if evidence is provided that the fund is an investment fund pursuant to § 1 of the Investment Tax Act (Investmentsteuergesetz; InvStG) or a special investment fund pursuant to § 53 InvStG. For funds not certified accordingly, the current tax deduction logic is applied; if no tax base (Bemessungsgrundlagen) parts are delivered, the income amount is taken as the tax base.
The following information relates to the situation where the before-mentioned evidence is not provided.
For non-certified German funds, the effective standard tax rate on income comprises a standard rate of 25% plus a solidarity surcharge (SolZ; Solidaritätszuschlag) of 5.5% of the standard rate.
The tax calculation for non-certified German funds is done on the following tax bases (Bemessungsgrundlagen):
Cash distribution:
- Domestic Dividend Part;
- REIT-Part;
- Estate Part.
Accumulation (Thesaurierung):
- Domestic Dividend Part;
- Foreign Dividend Part;
- Interest Part;
- REIT-Part;
- Estate Part.
Note: If no tax base (Bemessungsgrundlagen) parts are delivered, the complete income amount is taken as the tax base.
Distributions of tax liquidity are not processed by Clearstream Banking.
Availability of relief
Click on the zoom icon to view the diagram showing the availability of relief at source and/or reclaim of capital income tax on income from German funds that are not certified, their income distribution is therefore subject to capital income tax.
| Eligible beneficial owners | Relief at Source | Quick Refund | Standard Refund |
Residents of Double Taxation Treaty countries | No | No | Yes |
Residents of Germany | No | No | No |
| Dividends paid to a foreign investment fund pursuant to § 1 “InvStG” a | No | No | Yes |
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a. Clients holding German taxable securities in their omnibus accounts on behalf of an investment fund that is subject to full company tax rate (“unbeschränkt körperschaftsteuerpflichtig”) in Germany, can request a reduced tax rate of 15% (KESt incl. SolZ) on relevant income payments by providing the status certificate and tax reduction breakdown within 18 months following the taxable income event (§7(5) InvStG). Clearstream Banking will refund the overpaid tax for those beneficial owners (11.375%).
Relief at source and quick refund
Relief at source is not available through Clearstream Banking. Quick refund is available for investment funds with unlimited tax liability (“unbeschränkt körperschaftsteuerpflichtig”) in Germany.
Standard refund
A standard refund is available from the federal central tax office (“BZSt”) if the beneficial owner qualifies for the benefit of a reduced rate of capital income tax in accordance with a Double Taxation Treaty (DTT) between its country of residence and Germany.
A reclaim of capital income tax is currently not available through Clearstream Banking.
Taxation of German growth funds / accumulation funds
The reinvestment of a German fund / accumulation fund, which is according to the height of the revenue that the fund achieved during the business year, is liable to tax according to the German Income Tax Act (EStG).
Distributions of tax liquidity are not processed by Clearstream Banking.
The responsibility for taxation has changed over the years. The current rule applied for CBL clients is:
- InvStG 2018 (as of 1 January 2018)
Nocapital income tax (KESt and SolZ) is deducted by Clearstream Banking for fund distributions of German funds, if evidence is provided that the fund is an investment fund pursuant to § 1 InvStG or a special investment fund pursuant to § 53 InvStG. For funds not certified accordingly, the OGAW IV tax deduction logic is applied. (see Equities – rates, eligibility, availability of relief etc. – Germany) If no tax base (Bemessungsgrundlage) parts are delivered, the income amount is taken as the tax base.
Distributions of tax liquidity are not processed by Clearstream Banking.