Guide to German Exemption Order (Freistellungsauftrag)
- Ricardo Batista
- Germany
- June 7, 2024
- Contact your bank or investment brokerage and ask for the Freistellungsauftrag form. Some banks provide these forms online or via their app.
- Fill up the form with necessary details like name, address and tax ID (Steuer-Identifikationsnummer).
- Choose the amount up to which you want to get exemption. This can’t exceed your annual tax-free allowance.
- Submit the form back to the bank.
- The bank would process the form and apply the exemption order to your account. The order remains valid until you change or cancel it.
- Personal identification details (name, address)
- Tax ID (Steuer-Identifikationsnummer)
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Table of Contents
Description
What is it?
An exemption order (Freistellungsauftrag) is a document submitted to financial institutions in Germany which provides exemption from capital gains tax up to the tax-free allowance, about 801€ annually for single individuals and 1,602€ for married couples.
Who needs it?
Residents of Germany with bank accounts or investments accruing interest or dividends. Ideal for people who want to avoid unnecessary tax deductions up to the prescribed exemption limit.
Procedure
Required Documents
Providers that can do it for you
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Additional details
Exemption orders are only valid for the calendar year in which they are made and must be renewed annually for them to stay in effect. Also, if your bank doesn’t withhold tax in Germany, you will have to provide them with the non-assessment certificate (Nichtveranlagungsbescheinigung) from your local German tax office (Finanzamt).
Do note that if the total exempted amount exceeds the allowance, you will be fined by the tax office. So, it’s crucial that the total amount on all your exemption orders (if you submit more than one to different banks) doesn’t exceed the limit.
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