Tax
Church tax applies to members of a tax-collecting church at 8 per cent (in Bavaria and Baden-Württemberg) or 9 per cent (in the other federal states), levied on the flat capital-gains tax rather than on the income itself.
For investment income, church tax is levied on the Abgeltungsteuer (flat capital-gains tax), not on the income itself. The rate is 8 per cent in Bavaria and Baden-Württemberg and 9 per cent in the other federal states.
It is due only for members of a tax-collecting religious community. The broker withholds it automatically: through the KiStAM procedure (the church-tax deduction feature) it queries the member's religious affiliation with the Federal Central Tax Office.
Anyone who blocks this query prevents the automatic deduction but must then declare the church tax on investment income in the tax return. Together with the flat capital-gains tax and the solidarity surcharge, church tax raises the effective burden on investment income.
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