Well, I catch it "until you take out of the pension", which means even if 100 years passed from the initial investment to the ETF, any amount of appreciation (capital gains) will be taxed at least 25% by the Finanzamt. Therefore, you need to check, IMHO, either having an apartment for rent, as it is tax free after 10 years, or crypto currency investment as it is tax free after 1 year. Am I right? 🙂
To be fair, when cash in paid out in dividends and interest it is taxed even in the US - there is no such things as a mutual fund or ETF that can avoid paying tax for income it receives. This was a nice tax loophole that unfortunately closed, but its not the worst things I've ever seen. Good video explaining the Vorabpauschale!
May I suggest you a video, comparing main low cost brokers, such as Degiro, Scalable Capital and Trade Republic? It would be nice and helpful, as it’s sometimes difficult to find out what’s better cost benefit option.
Simple overview: - Degiro Pros: You can find pretty much any stock, etf and probably derivatives you can imagine. Cons: It's not a German based broker so there's no direct integration with the Finanzamt. In other words, it might be a headache to take care of the taxes... - Scalable: Pros: You can pay a subscription of 35 euros year and you don't pay any transaction fees on transactions over 250 euros. Cons: You have to pay fees on transactions under 250 euros... - Trade Republic: Pros: They currently give you 2% on cash sitting in your account (whereas scalable gives you 2.3% but you must be subscribed to one of their most expensive premium plans...) Cons: You always pay a transaction fee no matter what (maybe expect saving plans). In summary, I'd exclude degiro right off the bat because of the taxes thing. I have both Scalable and Trade Republic because they both offer things I want, but if I had to pick one I'd definitely go with Scalable. This ain't broker advice, I'm just a random dude writting a comment on youtube. Please do your own due diligence.
What happens when you sell at a loss? Do you get a credit to apply to future gains? Also, what happens if you have a virtual gain $100 in year 1, and then year 2 sell for $900. Do you get a rebate on the tax you pre-paid in year 1?
What happens if we sell at loss? Using your example: Jan 2023 I have 1000e Jan 2024 I have 1100e I pay 3.30e taxes. What if in Jan 2025 I only have 900e and sell at 100e loss?
Great video! However, I believe there is an error in the calculation: 17,85€ would be the Vorabpauschale for 1000€ Fictional Profit, not for €100. Am I wrong?
Thank you for double-checking our numbers. The preliminary capital gains tax („Vorabpauschale“) is based on the invested amount on Jan 1 of any given year, not on the fictional profit during that year. Therefore, the Vorabpauschale for 1.000€ invested is always 17,85€ no matter how much profit you make. Meaning both Axel and you are correct. 👍
Hi@@PerFinEx, thanks for this explanation, but in the video you show the calculation based on the fictional profit (100), not the initial amount (1000)... if the initial amount is the only thing that counts, why do we even need to consider the 100?
Hello Sir, I wanted to clarify one small thing. I am a doctoral student in Germany and receive tax-free stipend. Meanwhile, I am trading in US stock market with IBKR broker. I am Pakistani national. My capital gains for 2023 is less than 1000 euros. Should I file this year's tax just because I am trading stocks? Because my stipend is already tax-free and my capital gains for this year is also tax free.
Yes, pensions in level 3 allow lumpsum payout. After the age of 62 you will receive additional tax benefits when withdrawing (either monthly pension or lumspum).
Great video! I have one question, does this kind taxation apply to zero coupon bonds as well? Let's say I buy a 15 year bond that gives 0% dividend and costs 70 per share. The taxes will be required just at the end of the 15 year period, or should I pay taxes each year on this kind of bond on the virtual profit (30% divided in 15 years)? Thanks
@@PerFinEx the bond on the market, will probably rise year by year to match the value 100 at the end of the period. So year to year the increase in value would be similar to accumulating ETF, hence my doubt.
What if your profit is 0% because ETF didn’t grow at all, but you were paying in money whole year, so sum of money at the end of the year will be bigger because of your monthly payments. It will appear like profit to Finanzamt and you will be taxed this way? Based on your video, if Im not mistaken, they just look 1st January total sum vs 31 December and if it’s bigger you pay preliminary tax?
not an expert but I don't think it works like that. they will consider how much money was invested during the tax year and how much was the profit overall and then calculate the tax.
@@PerFinEx Once I sell the ETF in Germany I pay less taxes on the capital gain since I already paid taxes on it during the previous years for the Vorabpauschale. But, let's say that before selling the ETF, I will change my tax residence in another country. When I sell the ETF in the other country, how can I keep track of the Vorabpauschale to avoid double taxation?
If I understood correctly if I have a profit of 1000 EUR and it doubles every year (absurd case I know but follow me) that would mean that after 10 years I would have just in profits 1.024.000, just over a millionEUR, that means 1024000*2.55%*0.7*0.7*26,375% = 3374EUR which would be the taxes I would have to "preventively" pay for that year right? even if I sum the whole taxation for the 10 years together it would be 6756EUR which I don't find that bad. I am of course also against this preventive tax. Did I understand correclty? thanks a lot!
