Market Taxation Guide - Germany
This Market Taxation Guide (Germany) provides the following details:
- Reference information about taxes applied at source, through LuxCSD and its local depositories, to securities deposited in LuxCSD and
- Instructions for obtaining relief at source or a refund of withholding tax, where these are available, through LuxCSD.
Additional and improved tax information and procedures that are available will be included on an ongoing basis.
Important note:
This Market Taxation Guide (including any attachments and other links) is for informational purposes only and is not intended and should not be considered to be legal advice on any subject matter. Readers of this Market Taxation Guide, whether clients or otherwise, should not act or refrain from acting on the basis of any information included in this Market Taxation Guide without seeking appropriate legal or other professional advice.
Withholding tax
There is an effective withholding tax rate of 26.375%, which comprises a standard rate of 25% plus a solidarity surcharge (Solidaritätszuschlag; SolZ) of 5.5% of the standard rate.
| Debt securities | Trading restriction? | Withholding tax rate | Relief at source | Quick refund | Standard refund |
Yes | 0% / 26.375% | ||||
Residents of Double Taxation Treaty (DTT) countries | No | No | Yes | ||
Residents of Germany | No | No | No | ||
| Equities | Trading restriction? | Withholding tax rate | Relief at source | Quick refund | Standard refund |
Yes | 0% / 26.375% | ||||
Residents of Double Taxation Treaty (DTT) countries | No | No | Yes | ||
Residents of Germany | No | No | No | ||
German funds | Trading restriction? | Withholding tax rate | Relief at source | Quick refund | Standard refund |
Yes | 0% / 26.375% (a) | ||||
Residents of Double Taxation Treaty (DTT) countries | No | No | Yes | ||
Residents of Germany | No | No | No | ||
a. From 1 January 2018, no KESt and SolZ are deducted by LuxCSD 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 current tax deduction logic is applied; if no taxation base parts are delivered, the income amount is taken as the taxation base.
Clients, that hold German taxable securities 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.
Capital gains tax
There is no capital gains tax withheld through LuxCSD on securities held in LuxCSD. Capital gains tax may however be payable on specific gains. LuxCSD does not assist in this regard. Please consult your tax advisor for further information.
Stamp duty
There is no stamp duty withheld through LuxCSD on securities held in LuxCSD. Stamp duty may however be payable on specific transactions. LuxCSD does not assist in this regard. Please consult your tax advisor for further information.
Trading restriction
The Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA D) of the U.S. Inland Revenue Service makes it unlawful for the issuer of the affected securities or the sales partners of such issuer to sell those securities, within 40 calendar days of issue, to a U.S. citizen or to any persons who have spent more than 183 days in the U.S.A. (thus qualifying as U.S. residents for tax purposes).