Anlage KAP, KAP-INV and KAP-BET: when you must file, section by section, and reporting income from foreign brokers
Know when the capital-income forms are mandatory and when they are optional, what each section asks for, and how to declare dividends, gains and fund income from a broker that withholds no German tax.
What you will learn
- The difference between a duty to file the Anlage KAP and a voluntary filing that can only help you.
- What the Anlage KAP, KAP-INV and KAP-BET each cover, section by section.
- How to convert, calculate and declare income from a foreign broker, including the Vorabpauschale you must compute yourself.
- Which documents to keep for the tax office.
Explanation
The course Personal Finance & Money Management explained the annual tax return for employees. Investors add up to three forms to it. Line numbers change slightly every year, so this lesson describes the sections; always read the official instructions (Anleitung) of the current year's form in ELSTER or your tax software.
When you must file (Pflichtveranlagung). You are obliged to declare capital income if German tax was not withheld on it: income from a foreign broker or foreign bank account, interest on private loans, gains from crypto lending that count as capital income, dividends paid directly by a foreign company, and cases where the bank did not withhold church tax although you owe it. Not declaring taxable income is tax evasion even if the amount is small.
When filing is voluntary (Antragsveranlagung). You may file to (1) request the Günstigerprüfung (lesson 6); (2) have the withholding reviewed, for example to use an allowance left at one bank, to offset losses across banks with a Verlustbescheinigung, to correct an Ersatzbemessungsgrundlage, or to credit foreign withholding tax the bank could not credit; (3) apply the Teileinkünfteverfahren for a business stake. A voluntary review cannot increase your tax on the declared items; the tax office checks per bank and applies the better result.
Anlage KAP, section by section. The top block contains two decisive boxes: the request for the Günstigerprüfung and the request to review the withholding (Überprüfung des Steuereinbehalts). Then follows the block capital income with domestic withholding: total income per the bank's annual tax certificate (Jahressteuerbescheinigung), of which share gains, then the losses the bank certified, split into share losses and other losses. Next the Sparer-Pauschbetrag block, where you state how much allowance was already applied by banks. The block capital income without domestic withholding is where foreign-broker income goes: interest and dividends, share gains, other gains and losses, again split into share losses and other losses. A further block covers income taxed at the personal rate (private loans to related parties, life-insurance payouts, the Teileinkünfteverfahren option). At the end you enter the taxes already paid: Kapitalertragsteuer, Soli and church tax withheld by German banks, and creditable foreign withholding tax, both already credited and not yet credited, as shown on the bank certificate.
Anlage KAP-INV. This form is for fund income without German withholding, typically ETFs at a foreign broker: distributions, the Vorabpauschale and sale gains, each entered separately for equity funds, mixed funds, real-estate funds and other funds, because the tax office applies the Teilfreistellung rates (30, 15, 60 or 80 percent). You enter gross figures; the form applies the exemption. For sales you also give the acquisition data and the Vorabpauschalen already taxed, which reduce the gain.
Anlage KAP-BET. This form is for capital income earned through a partnership or a closed fund structure that sends you a Feststellungsbescheid (separate assessment notice), for example a GbR investment club or a closed real-estate fund. You copy the figures from that notice. Most private investors never need it.
Foreign brokers in practice. A broker outside Germany withholds no German tax, keeps no pots and applies no allowance. You must: (1) convert every transaction into euros at the exchange rate of the day (the official ECB reference rate is accepted); (2) compute each gain with FIFO per account, including fees; (3) compute the Vorabpauschale for each accumulating fund yourself (Basiszins × 70 percent × value on 1 January, capped at the actual increase; 3.20 percent for 2026 (2.53 percent for 2025), published yearly by the Bundesfinanzministerium); (4) apply foreign withholding tax credits up to the treaty rate (lesson 7); (5) keep the broker's annual statement, trade confirmations and your calculation sheet. Losses must also be declared; otherwise they are not recorded and cannot be carried forward.
Worked example
Hypothetical example: a single investor uses a broker in another EU country and has no German accounts with income. Year 2026, no church tax. Assumed exchange rate for all US payments: 1.10 US dollars per euro.
- US dividends $1,000 gross, 15 percent US withholding tax: €909.09 gross, €136.36 foreign tax.
- Share sales: FIFO gains €2,500 after fees.
- Distributions from an Irish equity ETF: €300 gross (KAP-INV, equity fund).
Anlage KAP, "without domestic withholding": dividends €909.09, share gains €2,500.00. Anlage KAP-INV: distributions €300.00 → after 30 percent Teilfreistellung €210.00.
Total capital income: €909.09 + €2,500.00 + €210.00 = €3,619.09. Minus Sparer-Pauschbetrag €1,000 = €2,619.09.
Tax at 25 percent: €654.77. Foreign tax credit: €136.36 (within the 15 percent treaty limit and below the German tax on those dividends). Tax after credit: €518.41. Soli 5.5 percent: €28.51. Total due: €546.92, payable after the assessment, not withheld during the year. Rule of thumb: set aside about 27 percent of foreign-broker income during the year so the payment does not surprise you.
Common mistake
Practice activity
On paper: decide for each case whether filing the Anlage KAP is mandatory, voluntary but useful, or unnecessary. (a) A retiree with €800 interest at a German bank and an FSA of €1,000 there. (b) An employee with a Swiss broker account that earned €150 of dividends. (c) An investor with a Verlustbescheinigung of €2,000 share losses from Bank A and €3,000 taxed share gains at Bank B. (d) A student whose bank withheld €200 of tax because she forgot the FSA.
Show solution
(a) Unnecessary: income is below the allowance and fully covered at the bank; nothing to correct.
(b) Mandatory: no German tax was withheld, so the €150 must be declared even though it is below the allowance (the allowance is then applied in the assessment and no tax results).
(c) Voluntary but useful: enter both; the tax office offsets €2,000 of losses and refunds €527.50 (€2,000 × 26.375 percent).
(d) Voluntary but useful: tick the review box; the allowance is applied and the €200 refunded. A Günstigerprüfung may also help if her income is low (lesson 6).
Limitations: church tax and other income types are ignored; a mandatory filing of other forms may already exist for other reasons.
Key takeaways
- Filing is mandatory whenever capital income escaped German withholding; it is voluntary and risk-free for reviews and the Günstigerprüfung.
- KAP covers everything with and without withholding; KAP-INV handles fund income from abroad with the Teilfreistellung; KAP-BET copies figures from a partnership's assessment notice.
- Foreign-broker income must be converted, FIFO-calculated and self-assessed, including the Vorabpauschale.
- Keep statements and a calculation sheet; set aside about 27 percent of foreign income for the tax bill.
Next step
Lesson 6 examines the Günstigerprüfung box in detail and the Teileinkünfteverfahren for people who hold a stake in a company.
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