This guide decodes the complexities of the system to guarantee your peace of mind. Whether you are an expat or a business owner, don’t let the bureaucracy hold you back. Follow our clear breakdown of the legal and fiscal procedures for Foreign Assets & Capital and keep your business moving forward.
Capital income in Germany is subject to a flat tax rate of 25% plus solidarity surcharge (Abgeltungsteuer). However, while German banks deduct this automatically, foreign brokers (like Interactive Brokers, eToro, or your home bank) do not. You are legally required to calculate these gains yourself and submit the complex Anlage KAP form. A common error is failing to convert foreign currencies to Euros at the exact date of each transaction, leading to incorrect reporting. We handle this granular calculation for you, ensuring every trade is reported with precision.
If you hold foreign ETFs or mutual funds (especially accumulating funds), you face a unique German tax hurdle: the Advance Lump Sum (Vorabpauschale). German law taxes “fictional” gains on funds even if you haven’t sold a single share. Ignoring this complex calculation is one of the most frequent triggers for tax office inquiries. We analyze your portfolio ISIN by ISIN to determine the correct taxable base under the Investment Tax Act, preventing unexpected tax debts.
With the global Automatic Exchange of Information (AEOI/CRS), the German Finanzamt now receives data from banks in over 100 countries. If you have inadvertently failed to report foreign income in previous years, simply “starting now” is risky. We specialize in voluntary self-disclosure (Selbstanzeige). By correcting past omissions proactively and professionally before the authorities investigate, we can often ensure you attain penalty-free impunity, paying only the back taxes and interest without facing criminal prosecution.
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Many countries withhold taxes on dividends before they even reach you (e.g., the 15% or 30% US withholding tax). Without expert filing, you end up paying tax twice. We scrutinize every payout to apply the relevant Double Taxation Treaty. We ensure that foreign taxes already paid are fully credited against your German liability (Anrechnung ausländischer Quellensteuer), so you never pay more than the mandatory 25% rate on your returns.
Germany is a tax haven for long-term crypto investors: profits are 100% tax-free if the assets are held for more than one year. However, proving this holding period requires impeccable documentation. We help you structure your crypto-tracking reports to secure this exemption legally.
Navigating German bureaucracy requires precision. We start by analyzing your specific situation to define the most effective legal and fiscal strategy for your case.
Once your strategy is set, we guide you through the paperwork. We identify exactly which documents are needed and prepare everything on your behalf to ensure a flawless application.
We handle the final submission to the local tax office (Finanzamt). We manage all communication to ensure full compliance and secure the fastest possible result for you.
At Agroup Consulting, we work with certified German tax advisors (Steuerberater) specializing in international taxation. With over 15 years of experience, a proven track record of results, and the trust of more than 500 expats in Germany, our firm delivers trusted services that help you navigate the complex German fiscal system with complete confidence.
A common dangerous myth is that you only pay tax on money you transfer to a German bank account. The reality is strict: Germany taxes worldwide income as it arises, regardless of where the funds are held. You must report:
Realized Gains & Dividends: Profit from selling stocks, crypto, or receiving dividends in foreign brokerage accounts (e.g., Schwab, Interactive Brokers, Vanguard).
Interest Income: Interest generated in foreign savings accounts or bonds, even if it remains in the foreign bank.
Accumulating Funds (ETFs): Even if your ETF automatically reinvests dividends, you may owe the “Advance Lump Sum” (Vorabpauschale), a tax on the theoretical growth of the fund during the year.
Through precise application of Tax Treaties. Most countries apply a “Withholding Tax” (Quellensteuer) at the source (e.g., the US takes 15% on dividends before you see them). Germany also taxes capital income at a flat 25% (Abgeltungsteuer).
The Strategy: Without intervention, you might pay both. However, Agroup Consulting ensures that the tax already paid abroad is legally credited (Anrechnung) against your German liability. Instead of paying 25% to Germany plus 15% abroad, you only pay the difference to Germany (10%), ensuring your total tax burden remains capped at the German flat rate. We meticulously convert your foreign tax statements to ensure every cent of foreign credit is recognized.
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Yes. Germany taxes residents on worldwide income. You must report interest, dividends, and gains immediately, even if the money never enters a German bank account.
Generally, no. We apply Foreign Tax Credits to deduct taxes already paid to foreign authorities (like the IRS) from your German bill, ensuring you do not pay double.
No. Even if dividends are reinvested automatically, you may owe the “Advance Lump Sum” (Vorabpauschale), a tax on the fund’s theoretical growth during the year.
Investment income is typically taxed at a flat 25% (Abgeltungsteuer), which is significantly lower than the top income tax rate of 45% applied to salaries.
