Why should a bank pay income tax?

Tax return: Investors should consider these points

Have you already submitted your tax return? If not, hurry because the deadline is getting closer. We have put together some tips for investors.

What do I have to consider with my tax return if I have invested money?

Whether interest from overnight money or share dividends: Anyone who makes a profit with their invested money, so so-called Investment income has to pay taxes. The annual tax certificate lists all income from securities and deposits that the customer has achieved in the relevant year. As a rule, the bank has already deducted the tax when crediting the investment income. However, there are a few exceptions in which it is useful or even necessary to report investment income in the annual tax return:

  • No withholding tax has yet been paid for capital income received. For example, the withholding tax does not apply to investment income from accounts or custody accounts held abroad.
  • Losses and profits at different banks should be offset against each other. A loss certificate from the bank is also required for this.
  • Your personal tax rate is below 25 percent, for example in retirement. In this case, it can be worthwhile to apply to the tax office for a cheaper test. If it turns out that the taxation based on the personal tax rate is more favorable for the investor, the tax office will repay the overpaid withholding tax.

An exemption of 801 euros applies to investors (double that applies to married couples). You can get one so that taxes are not withheld in the first place Exemption order set up at your bank (have your tax identification number ready).

The was newly regulated Fund taxation - more here. If you had already invested in funds before 2009, profits from the sale of these “old stock-protected units” could become taxable. But only if the allowance of 100,000 euros is exceeded.

Important: From the 2018 tax year, domestic and foreign funds will be treated equally. So far, investors have to foreign accumulation fund Specify and pay tax on "distribution-equivalent income" in your tax return. This will no longer apply in future, as the custodian banks automatically offset the already taxed advance lump sums against the capital gain when selling the fund units. But: In order to avoid double taxation, a tax return may be necessary. You should therefore keep all documents from purchase to sale in order to provide evidence of already taxed, distribution-equivalent income.

The following applies to investments abroad: Anyone who is taxable in Germany must also pay tax on their income here. Foreign investment income However, they are not subject to the final withholding tax and must therefore be stated in the tax return - otherwise you commit tax evasion. So that you are not charged twice for any taxes paid abroad, you can offset some of the amounts already paid against the final withholding tax.

you have one Life insurancethat you completed before 2005? Then you do not have to pay any taxes on the income, provided the contract has run for at least twelve years before payment. If you took out your life insurance from 2005, at least half of the income is tax-free if the payment is made after a term of twelve years at the earliest and you have already reached the age of 60 at this point in time. Since the insurance company levies the final withholding tax on the full amount, a tax return is also worthwhile here.

Also losses you can assert this by offsetting this against investment income. This applies to securities acquired after 2008. However, the tax office only offsets share losses with share gains, not with interest income. If there are profits and losses in an account, the bank will offset them and carry over unused losses into the new year. If you want to offset a loss against a profit that has been made on an account with another bank, this can only be done via the tax return. For this you should have your bank give you a loss certificate by December 15th.

Watch out for Cryptocurrencies! Virtual currency gains are not considered investment income - read what to consider here. Basically, Bitcoins & Co. have an exemption of 600 euros.

When do I have to submit my documents?

As in previous years, the deadline for filing the 2017 tax return is May 31 of the following year. The tax office accommodates the taxpayers somewhat: Since May 31 this year is a public holiday in some federal states (Corpus Christi), the declaration does not have to be submitted to the office until June 1, 2018.

From next year you will have more time: Then the submission will be extended by two months, i.e. until July 31st. However, if you miss the submission deadline from 2019, you have to expect a fee of 25 euros or more, the so-called late surcharge.

By the way: If you have hired a tax advisor or income tax aid association, the deadline for you will be extended to December 31 (from 2019 to the end of February of the following year).

Do I have to send receipts?

The so-called document retention requirement has been in effect since last year. That means: you usually no longer have to submit the receipts with your tax return. Even so, you are still obliged to collect and keep them. You should therefore always have important documents and certificates at hand if you have any questions from the tax office.

Why should I keep my bank statements?

There is no standard time limit for how long you have to keep account receipts - private individuals are not legally obliged to keep them. However, if you want to deduct the costs for a household-related service such as a cleaning person from tax, you are obliged to keep the relevant account statements at least until the tax assessment is received and the objection period has expired. You'll find more about it here.

For more information on how best to prepare your tax return, check out our blog post Spring Cleaning Your Finances! This is the best way to prepare your tax return

Print / PDF