Making long-term profits through trading is already difficult enough - the last thing you want is to hand them back to the tax office! Unfortunately, trading taxes cannot be completely avoided, but they can be drastically reduced in various ways. We will introduce you to the most effective, legal forms!
The most important in a nutshell
- In Germany, profits from stock exchange trading are subject to 25 withholding tax plus solidarity surcharge and, if applicable, church tax.
- Profits and losses are offset against each other. Tax allowances also help to reduce the tax burden.
- German brokers pay the tax for you immediately. In the case of foreign brokers, you have to pay the tax yourself in your tax return - this can save you considerable amounts!
- Further savings are possible with a trading GmbH
Trading taxes: what do traders have to pay?
Whether you are actively Earn money with day trading, Future Trading or just passively invest some capital in a ETF save up: If you make a profit, the tax office will show up at your proverbial door and demand its share.
Different amounts are due depending on where you are resident for tax purposes and your personal circumstances:
Trading tax for tax residence in Germany
Anyone liable for tax in Germany pays the flat-rate withholding tax of 25 % on profits from financial transactions.
- This trading tax is levied on almost all stock market profits and makes taxation very simple, but also painful - after all, a quarter of our return goes to the tax authorities!
- A further 5.5 solidarity surcharge is deducted from the final withholding tax. This results in a total tax burden of 26.375 %.
- For members of corresponding religious communities, a further 8 % (in Bavaria and Baden-Württemberg) or 9 % (in all other federal states) is also payable. Church tax is also calculated from the final withholding tax.
This results in the following loads:
| Withholding tax + solidarity surcharge (without church tax) | 26,3750 % |
| Withholding tax + solidarity surcharge + church tax 8 percent | 27,8186 % |
| Withholding tax + solidarity surcharge + church tax 9 percent | 27,9951 % |
Trading tax for tax residence in Austria
Austria uses a very similar model to calculate trading taxes. Here, a capital gains tax of 27.5 % is due. However, there are no additional charges such as solidarity surcharge or church tax.
Interest income from current accounts and savings accounts is an exception: A tax rate of 25 percent applies here in Austria.
Trading taxes for tax residence in Switzerland
A different tax system applies in Switzerland: here, profits on the stock exchanges are usually tax-free for private individuals! Opening a securities account - in Switzerland Wertschriftendepot is particularly worthwhile here.
In order to benefit from tax exemption, private investors must meet certain criteria:
- Holding period of the securities at least six months
- Capital gains should not exceed 50 percent of your total annual income.
- The volume of your stock market transactions (transaction volume) per year should be a maximum of five times your portfolio value.
- Only your own capital is used for the investment and not assets borrowed from your broker (see: Margin Call).
- Optionen Handeln or transactions with derivatives (except to hedge your securities against price losses) are prohibited.
The authorities use these five points to check whether you are a private investor or a professional trader. The former group benefits from tax exemption, while professional traders have to pay significantly higher trading taxes.
Withholding tax of 35 percent is payable in Switzerland on income from interest and dividends - so Swiss citizens pay slightly more than people from Germany or Austria.
Trading taxes for other tax residences
If you are liable to pay tax in another country, you must pay the trading tax applicable there. The differences can be considerable! For example, people from Sweden pay 30 % withholding tax, while citizens of Luxembourg only pay 10 %.
In Greece, interest income is only taxed at 10 %, whereas in Finland it is taxed at 28 %. These differences show very well why a change of tax residence is still a popular way to save taxes today!
Allowances, deduction only on payout, foreign brokers: How to save on trading taxes
The bad news first: unfortunately, it is not possible to avoid trading taxes completely by legal means. Fortunately, however, there are various tips and tricks that can be used to easily reduce the tax burden!
Please note: This is general advice and does not replace professional tax advice! To find out which option is ideal for you, you should consult a qualified tax advisor.
1. use allowances
Allowances are probably the easiest way to reduce trading taxes.
- In Germany, winnings of €1,000 per person are tax-free.
- This lump sum is available every year.
- For jointly assessed couples (married couples, registered civil partnerships), €2,000 remains tax-free.
- If you have already exhausted your tax-free allowance for one year, it may make sense to realize further gains in the following year.
If your income exceeds the allowance of €1,000 per person, you must pay trading tax on all further profits. In practice, this could look like this:
- Without the tax-free amount, the entire profit would be taxable. In this case, your tax burden would be €1134.13. In our example, you have saved € 263.35.
- You made profits of € 4,300 in 2025 Trading.
- The first €1,000 remains tax-free thanks to the saver's lump sum.
- You only have to pay tax on the remaining € 3,300.
- Your trading tax is 26.375 % (withholding tax and solidarity surcharge, no church tax).
- Your tax payable is 870.78 (€3,300 x 26.375 %).
Unfortunately, traders from Austria do not benefit from a tax-free allowance. They have to pay capital gains tax of 27.5 percent from the first euro.
Tax-free allowances are generally of no interest to people from Switzerland, as private individuals rarely have to pay trading taxes.
2. trading GmbH
Private individuals have to pay withholding tax and solidarity surcharge of 26.375 % - but different rules apply to companies! One of the most effective ways to save on trading taxes is therefore to outsource your trading activities to your own company.
A trading GmbH or VvGmbH (vermögensverwaltende GmbH) is a limited liability company set up specifically for trading and asset management. It offers traders huge tax advantages:
- Profits from share transactions are only taxed at 1.5 %
- For equity funds, only 12 % of the gains are taxable
- Depreciation on real estate and other assets is possible and allows further tax savings
- Only the actual profit of the GmbH is taxable. Expenses such as the managing director's salary or costs for bookkeeping and administration can be deducted from this and further reduce the tax burden.
At the same time, however, some special features and disadvantages must also be taken into account:
- If capital is withdrawn from the VvGmbH, you must pay tax on this (usually via withholding tax). This form is therefore particularly useful for long-term trading activities.
- There are additional expenses and costs for the VvGmbH. It is therefore only worthwhile for larger assets, as the tax savings then offset the costs.
- Numerous regulations and requirements must be observed, so it makes sense to seek advice from a specialized tax consultant and/or lawyer.
Overall, the VvGmbH is therefore the ideal choice for people with large assets who want to reduce their trading taxes - provided no regular withdrawals are planned.
3. brokers based abroad
If you use a German broker, the broker will withhold the withholding tax and pay it to the tax office when you realize a profit. You can usually claim tax-free allowances directly by submitting a separate application.
This option is a sensible simplification for small investors. However, those who actively Trading, Trading with the market technique, Newstrading will pay significantly higher trading taxes with such a broker!
For active traders, only a broker based abroad is therefore an option:
- A broker like CapTrader, which is based abroad, does not pay any trading taxes for you!
- Instead, you must declare the profits you have made correctly in your tax return.
- Due to the delayed taxation, the tax to be paid is only debited many months later. During this time, you can use the capital to make further profits.
- However, if you are taxed directly by a German broker, the trading tax will be deducted immediately. This will noticeably slow down your wealth accumulation!
This is a completely legal "trick" that does not directly reduce your trading taxes, but can massively increase your success on the stock market by shifting them.
4. favorability test
The favorable tax treatment is also a very simple way to reduce trading taxes.
- Persons liable to tax in Germany can request the application of the personal income tax rate for capital gains if this is lower than the flat-rate withholding tax (26.375 %).
- According to the basic income tax table, this is the case up to a maximum taxable income of EUR 21,000.
- This "favorable tax treatment" must be applied for at the tax office as part of the tax return.
- However, the exact amount may vary due to factors such as splitting, child allowances and the like.
People with very low or no income therefore benefit in particular from the favorable tax assessment, as their trading tax is reduced or completely eliminated.
- A popular variant is the transfer of Aktien mit hoher Dividende to your own children. They do not yet have their own income and benefit (after the favorable tax treatment) from the low tax rate on dividend payments. This allows you to create a good provision for your children with a low tax burden.
Good to know:
In Austria, the favorable tax treatment is referred to as the standard taxation option. It also allows capital gains to be offset according to the personal income tax rate.
Commercial trading: Which trading taxes apply?
In contrast to private traders, professional traders are subject to different tax rates. The area of professional traders is further subdivided into freelance/self-employed traders and employees who work for banks, for example.
- Freelance traders: Are taxed in the same way as other freelance professions. You can initially benefit from the basic tax-free allowance of 11,604 euros. Income in excess of this must be offset against the personal income tax rate. This progressive tax rate is based on personal income and can be up to 42% (for an income of €68,481).
- Employed dealers: Have to pay tax on their salary just like other professionals. However, as they act on behalf of financial institutions, they do not have to pay trading tax on profits themselves.
What counts as commercial trading?
Whether a market participant acts as a private individual or is a commercial trader is a key question when it comes to taxation. The answer depends on several factors:
- In Germany and Austria, you are considered a commercial trader if you trade with the capital of other investors.
- Even if you pass on your specialist knowledge in coaching sessions or seminars, you are running a business that requires registration and taxation.
- In Switzerland, commercial trading is determined on the basis of several points: Holding period of securities less than six months, more than half of your annual income comes from capital gains, the transaction volume of your stock market trades exceeds five times your portfolio value, you use borrowed capital, you trade options or other derivatives (except for hedging against price losses).
In many cases, the classification can cause displeasure and sometimes lead to lengthy legal disputes. We therefore recommend that you discuss the scope of your trading activities with a tax advisor in good time and consult a lawyer if necessary.
Good to know:
Whether trading is private or commercial does NOT depend on the amount of money traded, the number of trades or any other activities.
Trading taxes only on payout? Attention!
You often hear that trading taxes are only payable when the money is paid out, i.e. when the money won is transferred from the securities account to your own account. This is not correct!
- Withholding tax (Germany) and capital gains tax (Austria) is payable if you make a profit.
- This is the case when you close a position with your broker with a plus.
- Trading taxes are due now, not just when the money is paid out.
The exceptions to this rule:
- Profits and losses are offset against each other. So if things have not been going well recently and your total return is currently negative, no tax may be due on your successful trade.
- If you use a broker from abroad, the relevant tax will also be levied when the lucrative position is closed; however, it will not be settled until your next tax return, as a foreign broker (unlike domestic providers) does not automatically withhold the amount.
Important:
Trading taxes are not only due when the deposit is paid out to the account! They already arise when a position is closed with a profit.
Conclusion: Foreign brokers offer advantages in trading taxes
Anyone who trades in shares, short-term bondsAnyone who makes a profit from dividends or other financial products will in most cases have to pay tax on it.
- In Germany, flat-rate withholding tax, the solidarity surcharge and, where applicable, church tax are levied on such income. This leads to a deduction of at least 26.375 %.
- There is also a similar trading tax in Austria. It is 27.5 %, without any further distinctions.
- In Switzerland, profits on the financial markets are generally tax-free for private investors.
Don't want to hand over around a quarter of your profits to the tax authorities? Then there are several options available to you!
- If your income tax rate is lower, you can have this applied instead of the flat-rate withholding tax (favorable tax assessment, standard taxation option).
- Traders with larger assets can benefit from a trading GmbH, as only a fraction of the trading tax is payable here.
- A broker like CapTrader, which is based abroad, helps all types of traders. It does not automatically deduct the trading tax for you, so your money is available for longer and enables higher returns.
As a trader, you don't just have to accept trading taxes! Tax optimization is one of the most important factors for sustainable stock market success. Particularly people who want to Earn money with day trading would hardly be able to avoid a reduction in the tax burden.
