Capital gains tax is levied on income from investmentssuch as dividends, interest and realized capital gains and applies to both private individuals and corporations such as companies. As a withholding tax , it is usually paid directly to the tax office by the place where the income is generated, so that investors do not have to take any active steps.

It is also a final withholding tax, which therefore does not have to be included in the tax assessment and provides for a uniform tax rate of 25%. A solidarity surcharge and church tax may also be added, meaning that the effective tax rate is often around 28%. The saver's allowance grants a tax-free capital gains sum of € 801 for single people and € 1602 for married couples, up to which no capital gains tax is payable.