What is the advance flat rate?
The advance lump sum is a special tax regulation for income from accumulating or partially accumulating funds. Since 2019, it has been levied annually and represents an advance taxation of future expected increases in value.
Important: The advance lump sum is deducted again from the actual sales profit when the fund shares are sold to avoid double taxation.
How is the advance lump sum calculated?
The advance lump sum is not based on actual profits but is calculated using the following formula:
Advance lump sum = 70% of the base interest rate × value of the fund share at the beginning of the year
- The base interest rate is set annually by the Deutsche Bundesbank on 02.01.
- The advance lump sum is limited to the so-called basic income. This corresponds to the difference between the first and last redemption price in the year, plus any distributions.
- If there is no redemption price, the stock market or market price is used.
The calculated advance lump sum is then subject to withholding tax of 25% – plus solidarity surcharge and, if applicable, church tax.
When is the advance lump sum considered received?
The advance lump sum is not recorded immediately but always on the first working day of the following year as income. This is regulated by § 18 para. 3 InvStG.
- Base interest rate (02.01.2025): 2,53%
- 70% of this: 1,771%
- Fictitious receipt: 02.01.2026
