Günstigerprüfung: Flat Withholding Tax vs. Your Personal Tax Rate
Germany’s 25 % flat withholding tax plus solidarity surcharge (26.375 %) is a default — not a law of nature. If your personal marginal tax rate is lower, the Günstigerprüfung (favourability check) in the Anlage KAP tax form lets you request that your capital income be taxed at your individual rate instead. The tax office calculates both options and automatically applies the cheaper one — so the request carries no risk.
When the request pays off: the marginal rate threshold
Rule of thumb: the Günstigerprüfung is worthwhile when your personal marginal tax rate is below roughly 25 %. That’s typically the case with taxable income roughly below €19,000 (single) or €38,000 (married) — think retirees, part-time workers, students with portfolios, or years with parental leave or a sabbatical.
A worked example: a retiree with low taxable income and a marginal rate of around 18 % earns €4,000 in capital income above the saver’s allowance.
- Flat tax incl. surcharge: €4,000 × 26.375 % = €1,055
- Personal rate: €4,000 × approx. 18 % = around €720
- Refund via the favourability check: around €335
For high earners at a 42 % marginal rate, nothing happens: the tax office keeps the flat tax. Church tax payers should also know that church tax on capital income slightly reduces the flat rate (to 24.45 % at 9 % church tax) — this also enters the comparison.
Concentration risks, ETF overlap and look-through analysis – free with MoneyPeak.
Anlage KAP: filing the request correctly
You request the Günstigerprüfung with a single tick in line 4 of the Anlage KAP ("favourability check for all capital income"). Key points:
- Declare everything: the request only applies to all capital income together — cherry-picking individual accounts is not allowed.
- Get your tax certificates: the bank’s annual tax certificate provides all figures for the form, including tax withheld and exemption order used.
- Use loss years: if you want to offset losses from loss pots across banks, you need the Anlage KAP anyway — the favourability check then costs just one extra tick.
- Don’t forget the Vorabpauschale: the Vorabpauschale on accumulating ETFs also counts as capital income and benefits from the lower rate.
MoneyPeak simplifies the prep: the tax report aggregates income, Vorabpauschale amounts and partial exemptions across all accounts — giving you the Anlage KAP figures at a glance.
Two final notes: the Günstigerprüfung only ever applies to the respective tax year — you must request it anew in every return. And anyone permanently below the basic tax-free allowance is often better off with a non-assessment certificate (NV-Bescheinigung): the bank then withholds no flat tax at all, and the annual filing becomes unnecessary.
Frequently asked questions
Can the Günstigerprüfung result in higher tax?
No. The tax office only applies your personal rate if it is actually lower than the flat withholding tax. In the worst case, nothing changes.
Who typically benefits from the favourability check?
Retirees, part-time workers, students and anyone with taxable income roughly below €19,000 (single) or €38,000 (married) — i.e. a marginal tax rate below about 25 %.
Do I have to disclose all my brokerage accounts?
Yes. The check applies only to all capital income of a year combined. You must declare all income in the Anlage KAP, including amounts already settled via withholding tax.
Concentration risks, ETF overlap and look-through analysis – free with MoneyPeak.