Debt securities – rates, eligibility, availability of relief etc. – Germany (CBL)
Capital Income tax
| Standard tax rate: | 0% / 26.375% | Trading restriction: | Yes |
Interest on most debt securities held in Clearstream Banking is not subject to German capital income tax and is systematically paid gross with no action required of the client or beneficial owner to obtain exemption.
There is an effective tax rate of 26.375% on interest from the following corporate debt securities, depending on their character in each case:
- Convertible bonds (Wandelschuldverschreibungen);
- Jouissance shares: Profit participating rights that do not entitle the owner to liquidation proceeds (Genussscheine ohne Anteil an Liquidationserlös);
- Bonds conveying an interest in profits of the issuer (Gewinnobligationen).
This effective rate comprises a standard rate of 25% capital income tax (Kapitalertragsteuer; KESt) plus a solidarity surcharge (Solidaritätszuschlag; SolZ) of 5.5% of the standard rate.
Availability of relief
Click on the image to view the diagram showing the availability of relief at source and/or reclaim of capital income tax on income from German debt securities.
| 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 |
Income payments subject to KESt paid to a certified investment fund pursuant to § 1 InvStGa | 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 tax rate 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.