Vorabpauschale calculator — German advance tax on accumulating ETFs
An accumulating fund pays nothing out, so before 2018 a German investor could hold one for decades and owe nothing until the day they sold. The Vorabpauschale exists to close that gap: it charges a small amount of tax each year on a return the fund has not distributed, and credits what you paid against the bill when you eventually sell. It is best understood not as a new tax but as the timing of an old one being brought forward.
The calculator
How it works
Three steps, and the second is the one that matters. First the Basisertrag: 70% of the Basiszinssatz — 2.25% for 2026, giving 1.575% — applied to the value at the start of the year. Second, the assessment is capped at the fund's actual gain over that year, which is why a flat or falling year produces nothing at all rather than a smaller bill. Third, the Teilfreistellung exempts part of what remains by asset class, 30% for an equity fund against 0% for a bond fund, and the rest is taxed at 25% plus the 5.5% solidarity surcharge on top of it, or 26.38% all in. For an equity ETF in an ordinary year that is 0.29% of the holding, before the annual allowance is applied.
What it assumes
The projection applies the 2026 Basiszinssatz to every future year, while the finance ministry sets a new one each January — it has ranged widely in recent years, and the drag moves with it proportionally. The tax due on sale is not modelled at all: selling triggers the ordinary charge on whatever gain has not already been assessed, with the same partial exemption applied and every Vorabpauschale you have already paid credited against it, so the yearly figures here are a timing cost rather than an addition to the lifetime bill. The optional church tax uses headline rates without the deduction that partially offsets it, which overstates the cost for church members by roughly half a percentage point, and the allowance is treated as wholly available to this one fund when in practice it is shared across every euro of capital income you receive.
The background, in prose
ETF tax in Germany — Vorabpauschale and Teilfreistellung explained explains the rules this calculator applies, why they are shaped the way they are, and what they mean for choosing a fund.
Common questions
- Does a bad year still cost me anything?
- No, and that is the one genuinely generous part of the rule. The assessment is the lesser of the Basisertrag and the fund's actual gain, floored at zero, so a year in which the fund ends flat or down produces a Vorabpauschale of nothing. Drag the return slider to zero and the tax line goes to zero with it. The trade-off is that the deferral you keep in a bad year is repaid in full when you sell, because the untaxed gain is simply still there in the sale calculation.
- At what portfolio size does the Sparer-Pauschbetrag stop covering it?
- At roughly €90,703 for a single filer holding an equity ETF, on the 2026 Basiszinssatz. Below that the allowance of €1,000 absorbs the whole taxable assessment and the Vorabpauschale costs you literally nothing; above it you begin paying on the excess. The figure moves every January with the Basiszinssatz and it assumes the allowance is not already spent on dividends or realised gains elsewhere — set the allowance selector to "Used elsewhere" to see the cost without it.
- Should I buy a distributing fund in Germany instead?
- It makes far less difference than in most of Europe, which is the whole point of the rule. A distributing fund is taxed on its payouts as they arrive and an accumulating one is taxed on the Vorabpauschale instead, both at the same 26.38% after the same partial exemption. The advance charge exists precisely to remove the deferral advantage an accumulating fund would otherwise enjoy, so the decision comes back to the ordinary considerations — whether you want the cash, and what your broker charges to reinvest it.