The saver's allowance is the easiest way to save tax on capital income in Germany. For it to apply when your bank deducts tax, you need an exemption order (Freistellungsauftrag). Many savers give money away here because the order is missing or badly split. Here is how to get it right.
What is an exemption order?
With an exemption order you instruct your bank to pay capital income up to a certain amount without deducting capital gains tax. The upper limit is the saver's allowance: €1,000 per person and €2,000 for jointly assessed married couples and civil partners. You can usually file, change or delete the order online. It applies from the day it is filed and remains valid until revoked. You need your tax identification number.
The total must not exceed €1,000
If you have accounts or custody accounts at several banks, you have to split the allowance. Banks report the exemption orders to the Federal Central Tax Office. If you exceed the limit, this will be noticed and may lead to queries from the tax office. Conversely, an allowance that is not assigned anywhere is not applied by any bank.
How to split sensibly
Split your exemption order according to the income you expect in the current year. A simple approach:
1. Estimate the income per bank: interest (balance × rate), dividends and distributions from last year, planned sales with a gain and the advance lump sum for accumulating funds.
2. Take partial exemption into account for funds: for an equity ETF, only 70 % of the income counts against the exemption order.
3. Assign each bank its share. Give any remainder to the bank whose income is hardest to predict, usually the custody account.
4. Check in autumn whether the split still fits and adjust it, especially before the advance lump sum in early January and before larger sales.
Example
An investor has €20,000 in a savings account at 2 % (€400 interest) and a custody account with an equity ETF that distributes about €700, of which €490 counts after partial exemption. In total he expects €890 of taxable income. He assigns €450 to the savings account and €550 to the custody account. Everything is covered, and a €110 buffer sits where income fluctuates.
What if it goes wrong?
If you assigned too little to a bank, it deducts tax even though allowance is still unused at another bank. The money is not lost: you declare the income in Annex KAP of your tax return and the tax office refunds the overpaid tax. Worked example: you receive €1,500 in dividends at a bank to which you assigned only €200 because €800 is unused at another bank. The bank withholds €342.88. Correct would have been €131.88, so you reclaim €211 through your tax return.
Married couples: a joint exemption order
Jointly assessed married couples can file a joint exemption order of up to €2,000. It applies to joint accounts and to both partners' individual accounts. If one partner does not use their share, the rest is applied to the other. After a separation or the death of a partner, check the orders.
Children and low earners
Children also have their own saver's allowance of €1,000; parents file the exemption order. If total income is below the basic allowance of €12,348 (2026), a non-assessment certificate is often the better choice: then all capital income stays free of deduction, even above €1,000.
Check with the calculator
In the capital gains tax calculator you can enter under “Allowance already used elsewhere” how much of your allowance is assigned to another bank. The calculator then shows how much allowance is still free in this calculation and how much tax is due. The basics are covered in the main guide to capital gains tax. The figures are non-binding guidance, not tax advice.