What is an Exemption Order?

The capital gains tax encompasses all income from investments, such as interest from a savings account, profits from fund shares, or commodities. Since 2009, all capital gains in Germany have been taxed at a rate of 25%. However, there is a way to reduce this tax burden, namely through the saver’s allowance and advertising costs. However, to make use of this allowance, certain steps must be taken, and this is where the exemption order comes into play.

Capital gains tax allowance 2025 – how much is it?

In 2025, every eligible saver will have a tax allowance of 1000 euros for capital gains, and jointly assessed couples can deduct 2000 euros. This means that no taxes must be paid on income below this threshold. 

To reclaim the overpaid tax, the corresponding form can be filled out during the annual tax return and submitted along with the KAP annex, after receiving a certificate of withholding tax paid from the bank. After positive verification, a tax refund for capital gains will be granted.

However, there is another option: the bank paying out the capital gains can automatically consider the saver’s allowance. For this, an exemption order must be sent to the bank. Here is how it is done.

Exemption order tax office – where and how to apply?

The application for the exemption order is made at the bank, savings bank, or any other place where the money was invested. In most cases, a pre-made form is available, which needs to be filled out and submitted. The exemption order for capital gains is usually valid for the entire calendar year, but an unlimited validity period can also be requested.

If multiple bank accounts with capital gains exist, multiple exemption orders must be submitted accordingly. However, it is important to ensure that the total amount of these orders does not exceed 1000 euros (or 2000 euros for jointly assessed couples). The tax office monitors the tax exemptions, and if a higher amount is stated than is permitted, this can have serious legal consequences. Since 2011, a tax identification number is also required to file a request.

Exemption order for capital gains tax – until when must it be submitted?

The deadline for submitting the application for tax exemption for capital gains usually ends on the last working day of the bank in the respective year, although each institution can set a different deadline. To ensure that all formalities are completed on time, the information on the bank’s website should be checked or a branch visited directly.

Exemption order or tax return – which option is better?

The decision between an exemption order and a tax return depends on whether a tax exemption application is filed or whether the income from capital investments exceeds the allowances. If no exemption application is filed or if the income exceeds the limit, the bank will levy a capital gains tax of 25% and possibly a church tax, which will be forwarded to the tax office. It is therefore advisable to know all options for tax reduction to manage wealth consciously.

Nevertheless, there remains the possibility of obtaining a refund by submitting a tax return. However, note that this process is more complex and requires time for tax assessment before the money is reimbursed. It is therefore advisable to apply for an exemption order to benefit from the tax concession for capital gains.

The simplest way to submit a tax return for a capital gains tax refund is offered by the German tax software Taxando. It is characterized by its user-friendliness, speed, and efficiency in handling all formalities.