Interest is subject to withholding tax
Investors of overnight money will ask yourself in which amount your interest on the call money account must be taxed. Interest is a capital gain, which since 01.01. 2009 are subject to withholding tax. This tax replaced the previous capital gains tax and amounts to a flat rate of 25 percent.
Added to this are the solidarity surcharge and church tax (for non-denominational investors). However, the legislator has set a tax exemption up to a certain amount with the saver’s lump sum.
Exemption order for final withholding tax
Single and married people have the opportunity to claim the saver lump sum amounting to 801 (singles) or 1,602 euros (couples). This lump sum covers everything and must be applied for at the bank via an exemption order.
The exemption application then applies to all current as well as overnight and term money accounts at a bank or savings bank and also to accounts at other financial institutions. However, interest income and capital gains above this flat rate must then be fully taxed.
Non-assessment Certificate instead of exemption order
Low-income earners also have the option to use the basic allowance of 8,820 euros for single persons and 17,640 euros for married couples. For this, a non-assessment certificate with proof of salary must be requested from the responsible tax office.
All interest income above this limit is tax-exempt. Otherwise, there is only the possibility of reclaiming overpaid taxes via the annual income tax return. In order to do so, you must enter your entries and taxes in the form “Capital incomes” in short: KAP.
Conclusion The exemption application for the final withholding tax can be issued by your bank or insurance company.