However, the disclosure of private investment income in the tax return may be mandatory or advisable; see in particular the following examples:
The disclosure of investment income is required when
- no capital gains tax has been withheld for investment income (e.g. for loans to relatives or for shareholder loans, tax refund interest pursuant to Section 233a AO, interest from foreign banks). The tax rate for this income in the context of the income tax assessment then regularly corresponds to the final withholding tax rate of 25% (cf. Section 32d EStG).
- no church tax was withheld from the investment income despite the obligation to pay church tax (e.g. due to the submission of a blocking notice). In this case, it is sufficient to indicate only the capital gains tax due on it. The church tax is then determined as part of the assessment.
A reduction of the final withholding tax due to church tax liability can only be achieved if the entire investment income is also declared.
The disclosure of investment income is useful if
- taxation of all investment income at the personal income tax rate is more favorable than the 25% capital gains tax deduction (so-called favorable test). This can also occur, for example, by taking into account losses from other types of income (e.g. from renting and leasing).
- the taxation of profit distributions from an investment in a corporation at the personal tax rate of 60% of the income(so-called partial income method) is more favorable than the capital gains tax deduction. The partial income method can also be advantageous if, for example, interest has accrued in connection with the financing of the capital share and is to be (partially) taken into account.
A corresponding application is possible with a shareholding of at least 25% or with at least 1% and professional activity with a significant entrepreneurial influence on the company.
- the capital gains tax deduction has been too high; this is possible, among other things, if no exemption order was issued and therefore the saver’s lump sum of 801 euros (spouse: 1,602 euros) could not – or could not fully – be taken into account.
- (capital) losses from capital assets are to be offset against capital gains.
Since, for example, banks, savings banks or financial service providers sometimes no longer automatically issue tax certificates for private investment income, these may have to be requested if the inclusion of investment income in the income tax assessment is intended.
For losses incurred in a bank custody account that are not to be carried forward in this custody account for future loss offset, but are to be offset against other (capital) gains within the scope of income tax assessment, a corresponding certificate from the bank is required.
Even in the case of a favorable test (i.e., if the personal tax rate is lower than the flat tax rate of 25%), only the saver’s lump sum of EUR 801 (spouse: EUR 1,602) can be taken into account as a reduction.