SteuerGo FAQs

(2025) Can I deduct income-related expenses for capital gains?

As a rule, no. With the introduction of the withholding tax in 2009, the tax liability on capital gains is settled at a flat rate of 25 percent. Therefore, the deduction of actual income-related expenses is excluded. Instead, a saver's allowance is granted:

• 1.000 Euro for single persons
• 2.000 Euro for jointly assessed spouses

This allowance covers all expenses related to capital gains, such as custody fees or advisory costs.

No income-related expenses even with favourable tax assessment

Even if you apply for a so-called favourable tax assessment – i.e. taxation of your capital gains at the individual tax rate if it is below 25 percent – no actual income-related expenses may be claimed.

This has been confirmed by the Federal Fiscal Court (BFH ruling of 28 January 2015, VIII R 13/13).

Exception: Income-related expenses in mandatory assessment at individual tax rate

In certain cases, the withholding tax does not apply, but a mandatory assessment at the individual tax rate does. Then the general rules of income tax law apply, and income-related expenses may be deducted with proof.

In these cases, the saver's allowance is not granted, but actual expenses – e.g. interest on debt – can be considered (§ 32d paragraph 2 EStG).

Examples of such mandatory assessments:

• Capital gains are part of other types of income, e.g.:
  • Income from rental or commercial activities
• Sale of shares in corporations with a stake of more than 1 percent
• Capital gains in business assets
• Interest from back-to-back financing
• Interest from a corporation or cooperative to its shareholders
• Private loans between related persons (e.g. spouses), if:
  • The borrower uses the loan to generate income and
  • the interest on debt is deducted as business expenses or income-related expenses

  → In this case, the interest income for the lender is not subject to withholding tax but taxed at the individual tax rate (§ 32d para. 2 no. 1a EStG).

Current case law: Prohibition of deduction of income-related expenses is constitutional

The Federal Fiscal Court decided in a recent ruling on 08.04.2025 (VIII B 79/24) that the prohibition of deduction of income-related expenses in § 20 paragraph 9 EStG is constitutional – even in the case of high capital gains where income-related expenses significantly exceed the saver’s allowance.