Fully reinvest profits: No automatic withholding of capital gains tax at CapTrader
When investing and investing, the topic of tax is an important factor for a successful investment strategy. Of course, you will know that a different amount of capital gains tax is due on your realized gains depending on your place of residence. The capital gains tax (in Germany since 2009 in the form of the final withholding tax) is not automatically withheld at CapTrader, which means that almost your entire capital, including all income and gains, is fully available to you for profitable further investment. The only exception here is the deduction of a withholding tax on dividend payments - you can find out more about this in the section "Withholding tax with CapTrader".
Only in the following year you declare your accrued investment income as part of your personal tax return and can thus achieve an interest-interest effect for your profits. This is possible because your securities account is not legally located in Germany or your country of residence, but with our European partner Interactive Brokers. CapTrader is therefore exempt from the so-called "advance withholding".
Good to know: Since we do not withhold any capital gains taxes, you do not need to submit an exemption order to us. You can simply claim your saver's allowance in your tax return.
Withholding tax with CapTrader
As soon as you also hold shares in your securities account that pay dividends, the issue of withholding tax will come up. In general, a so-called withholding tax is deducted from share holders when a dividend is paid, so that only the net amount is credited to the securities account (net amount = gross dividend less withholding tax). The clearing houses are obliged to make this deduction directly "at source". The withholding tax deducted is then paid by the clearing houses to the responsible tax authority (for U.S. equities, for example, this is the U.S. Treasury Department).
Depending on the legal situation in your country, you can then offset this withholding tax paid against your capital gains tax payable - so you do not have to pay "double" tax on dividends. Important for your personal tax return: Your securities account statement is often already accepted as proof that dividend payments have already been subject to withholding tax. If this is not the case, you can obtain an official certificate from CapTrader, the so-called "tax certificate". Individual tax certificate (Tax Voucher), apply with costs.
Details on the individual dividend credits and their withholding tax deductions can be found in your Activity Statement (Account Statement: Activities) in your account management (Client Portal) at CapTrader.
Income with US withholding tax from US securities
For investors, a withholding tax rate of 30 % is due on income from dividends from U.S. securities. According to the double taxation agreement between the Federal Republic of Germany and the USA, a reduction of this withholding tax to 15 % is possible for dividends. This also applies to most other EU countries. In case of residence outside the EU, a different withholding tax rate may apply.
The reduction in withholding tax can be claimed by filing the appropriate U.S. tax form. At Opening a CapTrader deposit all non-U.S. individuals and corporations must complete this so-called "W-8" tax form to confirm their country of tax residence and clarify whether a reduced withholding rate applies to them.
Initial registration & data collection
In the online application, the W-8 form is automatically filled out for you, so you don't need to fill out any additional documents here!
Subsequently amended U.S. tax forms can be taken into account retroactively only for dividend payments within the same calendar year.
Important: Provided you keep all personal data up-to-date in the account management (Client Portal), this form will remain valid. Every three years, you will be prompted to check the information in the W-8 once and confirm that it is up to date.
If you do need to change your W-8 form, simply use our guide to updating your W-8 form that we have put together for you.
US Tax Forms
Notice: CapTrader recommends contacting your tax advisor for tax related questions. CapTrader is not allowed to provide tax advice.