Understanding German Loss Pots: Using Losses to Your Tax Advantage
Realised losses are worth real money for tax purposes — but only if you understand how Germany’s loss pots (Verlusttöpfe) work. Your bank tracks them automatically but offsets strictly by fixed rules: not every loss may neutralise every gain, and across banks nothing happens without your application.
If you understand the pots, well-timed loss realisation can noticeably reduce the 26.375% flat tax (incl. solidarity surcharge) on your gains.
Equity pot vs. general pot: what goes where
German tax law separates two loss pots — and the separation is strict: losses from selling individual stocks may only be offset against gains from selling individual stocks. Everything else, including ETF and fund losses, goes into the general pot, which is far more flexible.
Unused losses do not expire — the bank carries them forward indefinitely.
| Pot | What goes in | Can be offset against |
|---|---|---|
| Equity loss pot | Losses from selling individual stocks | Only gains from direct stock sales |
| General loss pot | Losses from ETFs/funds, bonds, certificates | All investment income: fund gains, dividends, interest, also stock gains |
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Loss certificate by 15 December and targeted harvesting
Loss pots only work within the same bank. If you have losses at broker A and gains at broker B, you need a loss certificate (Verlustbescheinigung) — the irrevocable application deadline is 15 December. It closes the pot at broker A and lets you offset via the Anlage KAP in your tax return (where, on a low income, you can also request the Günstigerprüfung).
Tax-loss harvesting works in Germany too: realise losing positions deliberately to neutralise gains in the same year. Example: you have realised €5,000 of stock gains and sit on a €3,000 paper loss in a single stock. Selling it in December cuts the tax base to €2,000 — a tax saving of around €791 (€3,000 × 26.375%). An immediate repurchase is possible, but note: for partial sales the FIFO principle determines which tranches count as sold — otherwise you may realise the wrong lots.
- Mind the order: the bank offsets within the year first; don’t waste the saver’s allowance (€1,000 / €2,000 married) in loss years.
- Depot transfer: when fully transferring to another bank, the loss pots only move along if the account holder is identical — otherwise secure a loss certificate first.
Frequently asked questions
Can I offset stock losses against ETF gains?
No. Losses from direct stock sales may only be offset against gains from stock sales. The reverse works, though: ETF losses in the general pot also neutralise stock gains, dividends and interest.
What happens to loss pots at year-end?
Unused losses do not expire; the bank carries them forward indefinitely. For cross-bank offsetting via your tax return you need a loss certificate — apply by 15 December at the latest.
Is selling and immediately buying back allowed?
In principle yes — Germany has no waiting period like the US wash-sale rule. With same-day buybacks at the identical price, the tax office may in individual cases examine abusive structuring — a few days’ gap or a similar substitute product avoids the discussion.
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