Exemption orders for capital gains: Do not lose oversight!
Many small investors put their deposits into several different daily allowance accounts in various banks. For each of these accounts, an exemption order for capital gains can be made in order to avoid full taxes. People who have a multitude of daily allowance accounts are collecting the same number of exemption orders. The investor has to be careful to keep everything in order. Writing down which bank got which order is an important and easy way to stay in control of the situation. It is a requirement in order to avoid problems with the revenue board. The quick and uncomplicated use of daily allowance accounts should not tempt investors to forget about the exemption orders.
All exemption orders together must not exceed the sum of 801 euros for single households. Married couples have a limit of 1602 euros. This lump sum for savers is replacing the old rules that had been effective until 2009. Exceeding this sum does not automatically create a problem with the revenue board. Not only does the total number of the exemption orders count, but the actual sum of the exempted interest does also. The total sum is automatically determined by the Federal Office for Taxes.
However, the investor is responsible for the correct tax declaration. If the investor conceals that he collected higher interest than allowed, the reaction of the revenue board will be harsh and swift. A penalty is likely then. In that case, the exemption orders must be corrected also. The German Federal Court has ruled that banks must not collect fees for the correction of amounts in the exemption orders (file number XIZR 269/69).
If the investor forgot to issue the exemption orders, the taxes are automatically forwarded by the banks. In that case, the investor can request the refund in his tax declaration. Therefore, he should fill out the form „revenue from capital investments“ in order to not give away the lump sum.
Although daily allowance accounts provide much flexibility for investors, the tax situation should always be kept in mind.