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Taxes on Bank Savings in Germany
(Interest on Bank Deposits & Capital Gains Tax – Kapitalertragsteuer)
Are interest earnings on savings taxed?
Yes, they are.
All interest (Zinsen) you receive from:
-
Savings accounts (Sparkonto)
-
Interest-bearing current accounts (Girokonto, if interest-bearing)
-
Fixed-term or overnight deposits (Festgeld, Tagesgeld)
-
Bank bonds
→ are treated as capital income (Kapitalerträge) and are subject to tax.
What type of tax applies?
This tax is called Kapitalertragsteuer (capital income tax).
It is withheld directly by the bank at the time the interest is credited.
Rates:
| Tax | Rate |
|---|---|
| Capital income tax | 25 % |
-
Solidarity surcharge | 5.5 % of the 25 % = 1.375 %
-
Church tax (optional) | 8–9 % of the 25 %
In practice, the total burden is usually around 26.375 % to 28 %.
Is there a tax-free allowance?
Yes, it is called:
Sparerpauschbetrag (tax-free allowance for private investors)
| Status | Annual tax-free amount |
|---|---|
| Single | 1,000 € |
| Married (joint assessment) | 2,000 € |
-
If your annual interest income is below this limit, you do not pay any tax on it.
-
To benefit from this, you must submit a Freistellungsauftrag (exemption order) to your bank.
Practical example
You receive 300 € interest in one year:
-
Without a Freistellungsauftrag:
→ the bank withholds about 79 € in tax automatically. -
With a Freistellungsauftrag for 1,000 €:
→ no tax is withheld, and you receive the full 300 €.
What if no tax was withheld or the account is abroad?
If you invest via:
-
a foreign bank, or
-
an account where no automatic tax withholding takes place,
→ you must declare the interest yourself in your tax return,
using the form Anlage KAP (capital income schedule).
Do I have to file a tax return because of the interest?
| Situation | Is a tax return mandatory? |
|---|---|
| The bank has already withheld tax | Usually no (unless you want a refund or correction) |
| No tax was withheld (e.g. foreign account) | Yes, you must declare the interest yourself |
| You did not fully use your Sparerpauschbetrag | A tax return is strongly recommended |
Key terms
| German term | Meaning (Arabic) |
|---|---|
| Zinsen | فوائد بنكية |
| Kapitalertragsteuer | ضريبة أرباح رأس المال |
| Sparerpauschbetrag | بدل الإعفاء الضريبي للفوائد |
| Freistellungsauftrag | طلب إعفاء من الضريبة لدى البنك |
| Steuerbescheinigung | شهادة ضريبية من البنك |
| Anlage KAP | استمارة أرباح رأس المال في الإقرار الضريبي |
Summary
-
Bank interest is subject to 25 % tax plus surcharges, typically around 26–28 %.
-
There is an annual tax-free allowance of 1,000 € for singles and 2,000 € for married couples.
-
To use this allowance, you must file a Freistellungsauftrag with your bank.
-
Excess tax withheld can be reclaimed via your annual tax return.
The editorial team of the website strives to provide accurate information based on thorough research and multiple sources. Nevertheless, errors may occur or certain details may be incomplete or not fully verified. Please treat the information in this article as an initial reference only and always consult the competent authorities or a professional tax adviser for binding and up-to-date guidance.
