German capital-loss offsetting: two pots, one deadline

Two brokerage accounts, one good year and one bad one — and a tax bill at the end of it anyway. The cause is rarely an error at the bank. It is a structural quirk: every German paying agent nets gains and losses only within itself, and no institution reconciles with another. Changing that is possible exactly once a year, and the date is 15 December. Here is what hangs on it, how the netting actually works, and what changed in withholding for 2026.

The base rule: capital losses stay within capital income

§ 20 (6) sentence 1 EStG draws a hard line. Losses from investment income may not be set against other categories of income, and may not be carried back under § 10d. A loss in a securities account reduces neither salary nor rental income. It reduces investment income only — this year, or as a carry-forward in later years.

The two pots, and why they exist

German banks maintain two loss-offsetting pots per account. The word “pot” appears in no statute; it is how banks implement § 20 (6) sentence 4 EStG, which provides that losses from the disposal of shares may be set only against gains from the disposal of shares.

That produces the asymmetry most readers miss. A share loss is a one-way street: it meets share gains and nothing else. A share gain is unconstrained — it can be reduced by losses on ETFs, bonds, certificates and by accrued interest paid. The restriction runs in one direction only.

The final stage is the one that trips people up: the saver’s allowance applies to whatever survives the netting, not to the gross gains. Reverse the order and the estimate comes out too low every time. The allowance itself — its size, splitting it across banks, the Freistellungsauftrag — is covered in our article on the Sparer-Pauschbetrag.

What changed in withholding for 2026

Until recently a third offsetting circle existed. Losses on derivatives could be set only against gains on derivatives, subject to an annual ceiling of €20,000, with a comparable cap for bad debts. The Annual Tax Act 2024 repealed both provisions — § 20 (6) sentences 5 and 6 EStG — outright, for all open cases.

For the withholding procedure, the Federal Ministry of Finance stated in its letter of 14 May 2025 that it would not object if banks implemented the change only from 1 January 2026. So 2026 is the first year the repeal actually shows up on a German broker statement — a good reason to treat older guidance on this topic with care.

The loss certificate: one date, one decision

While everything sits at one bank, the netting takes care of itself, and a loss remaining at year end carries forward automatically under § 43a (3) sentence 3 EStG. Add a second institution and the automation stops: bank A knows nothing of the losses at bank B.

The bridge is the Verlustbescheinigung, a loss certificate. It states the unsettled loss at one paying agent so it can meet gains at another in the annual tax return. The statute is terse:

“Der unwiderrufliche Antrag auf Erteilung der Bescheinigung muss bis zum 15. Dezember des laufenden Jahres der auszahlenden Stelle zugehen.” — § 43a (3) sentence 5 EStG

Three words carry the weight. Unwiderruflich — irrevocable; the choice cannot be withdrawn. Zugehen — it must have arrived at the bank, a postmark is not enough. 15 December — the provision allows no extension.

A worked two-broker example

An investor assessed individually realised €5,000 of gains on share disposals at broker A this year and €4,000 of losses, also on shares, at broker B. Her Freistellungsauftrag for the full €1,000 allowance sits with broker A.

Without a certificate, broker A withholds on €4,000.00 — that is €1,055.00 at 26.375% (25% withholding plus the 5.5% solidarity surcharge on it; church tax is excluded throughout). Meanwhile the €4,000 at broker B sits untouched in the share pot, waiting for future share gains at that broker.

With a certificate from broker B the two sides meet in the tax return: €5,000 less €4,000 leaves €1,000 — exactly the allowance, so nothing remains to tax. The difference of €1,055.00 comes back through the assessment.

Why this is not automatic

A certificate is all-or-nothing per bank: it states the entire remaining loss at that paying agent. And unlike a loss carry-forward, the saver’s allowance cannot be moved into a later year — unused, it lapses.

If broker B’s loss were €6,000 instead of €4,000, the netting would land at €1,000 negative. Tax would again be nil, but €1,000 of allowance would go unused for the year and €1,000 of loss would move into the carry-forward. Whether that beats leaving the loss in broker B’s pot depends on what that account earns in future years — a judgement that turns on the individual situation, and one a tax adviser is the right person to make.

What is still open before year end

Three things can still be influenced before 15 December: the state of the pots at each institution, how the Freistellungsauftrag is distributed across banks, and whether to apply for a certificate at all. All three depend on knowing where the pots stand — a figure that does not appear on a normal statement but in the loss-offsetting overview most German brokers file under “Steuern” or “Erträgnisaufstellung” in online banking.

Investors spread across several accounts have that same visibility gap outside tax, too. The Acutic workspace brings positions from different institutions into one picture without connecting to a bank, and how the analysis is produced is set out on the methodology page. It does not compute your tax, and is not meant to.

Frequently asked questions

This article is general information, not tax advice within the meaning of German law. For your own situation, consult a Steuerberater:in. Legal position: September 2026.

Further reading: The Vorabpauschale explained, Partial exemption for ETFs and the Vorabpauschale calculator. Create free account.

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