Make your child's investment income tax-free up to the allowance
An NV-Bescheinigung (German non-assessment certificate) lets a child receive investment income in their own securities account with no tax withheld from the outset, as long as that income stays below the child's personal allowances. It is the right tool once the income exceeds the Sparerpauschbetrag (German saver's lump-sum allowance), while the child would owe no tax in any case.
Anyone who invests for a child runs sooner or later into an unremarkable threshold: as soon as the investment income in the child's account climbs above EUR 1,000 in a year, the bank automatically withholds Abgeltungsteuer (German flat tax on investment income), even though the child is, as a rule, well below the level of taxable income. The NV-Bescheinigung closes exactly this gap. It is not a trick, but the certificate the legislature provides for investors whose income will probably not be taxed.
The NV-Bescheinigung does not prevent a tax that would later be refunded: it prevents too much from being withheld in the first place.
NV stands for Nichtveranlagung, non-assessment. The certificate under § 44a Abs. 2 Satz 1 Nr. 2 EStG confirms to the tax office that a person will probably owe no income tax, because their taxable income stays below the Grundfreibetrag (German basic tax-free allowance). Present this certificate to the bank, and the institution pays the investment income out gross: no Abgeltungsteuer and no solidarity surcharge are withheld at source.
This is the decisive difference from the normal course of events. Without an NV-Bescheinigung, the bank automatically remits 26.375 % Abgeltungsteuer on income above the Freistellungsauftrag (German exemption order lodged with the bank). For a child who owes no tax, that money would be recoverable through an income tax return, true, but it ties up capital and creates effort over months. The NV-Bescheinigung takes hold one step earlier: nothing is withheld at all.
The NV-Bescheinigung is not limited to children. It is open to any natural person whose income will probably stay below the threshold for taxation. In the context of a child's securities account it is especially useful, though, because children typically have no taxable income of their own beyond the investment income.
Kernaussagen
The tax-free room a child has is larger than many assume, because several allowances add up. Three building blocks govern the position for 2026.
| Building block | Amount 2026 | Legal basis |
|---|---|---|
| Grundfreibetrag | EUR 12,348 | § 32a EStG |
| Sparerpauschbetrag | EUR 1,000 | § 20 Abs. 9 EStG |
| Special-expenses lump sum | EUR 36 | § 10c EStG |
In sum this comes to around EUR 13,384 (2026), up to which a child can receive investment income without paying income tax.
A child's tax-free room in 2026
EUR 12,348 (Grundfreibetrag) + EUR 1,000 (Sparerpauschbetrag) + EUR 36 (special-expenses lump sum) = around EUR 13,384
This figure is a planning quantity, not a guaranteed ceiling for every individual case. It holds only if the investment income is the child's sole taxable income. If the child also earns income from work, say, the Grundfreibetrag is already used up in part or in full by that, and the tax-free room for investment income falls accordingly. The exact calculation depends on the individual case.
The NV-Bescheinigung is applied for at the tax office and then presented to the bank. It is worthwhile once the child's investment income exceeds the Freistellungsauftrag of EUR 1,000, while staying below the full room of the Grundfreibetrag.
The application runs through form NV 1 A. It is the form provided for natural persons, hence also for a minor child. For minors, the legal representatives, usually the parents, file the application in the child's name. The tax office checks, in doing so, that the assets genuinely belong to the child, that is, that the account is held in the child's name and the income is attributable to the child.
After its review, the tax office issues the certificate. This is presented to the bank where the child's account is held. From the moment it is presented, the bank pays the ongoing investment income out without withholding tax. Anyone who holds accounts at several banks can present the certificate to each, since it relates to the person and not to a single account.
The Freistellungsauftrag and the NV-Bescheinigung pursue the same goal, avoiding an unnecessary tax deduction, but they take hold at different points and at different levels.
| Feature | Freistellungsauftrag | NV-Bescheinigung |
|---|---|---|
| Protected amount | up to EUR 1,000 (child) | up to the room of the Grundfreibetrag |
| Where lodged | with the bank | with the tax office, then presented to the bank |
| Income covered | investment income only | all of the person's income |
The Freistellungsauftrag is the simpler route and entirely sufficient for many children's accounts: as long as the child's annual investment income does not exceed EUR 1,000, it suffices, and no tax is deducted in any case. Only once the income rises regularly above this threshold, while the child still stays below the Grundfreibetrag, does the NV-Bescheinigung come into its own. It then protects not only the first EUR 1,000, but the child's entire tax-free room.
An NV-Bescheinigung is, as a rule, issued for up to three years. It does not hold indefinitely, then, but must be applied for afresh once it expires, if the conditions still hold. It is wise to note the expiry date and to file a new application in good time before it lapses, so that no year arises in which the bank withholds tax again.
The certificate is also revocable. If circumstances change, because the child earns income of their own and will probably exceed the Grundfreibetrag after all, the tax office can or must revoke the certificate. The NV-Bescheinigung is thus no permanent status, but a snapshot of the expected tax position, to be reviewed regularly.
The most consequential misconception concerns not the tax, but health insurance. That the investment income stays free of income tax up to around EUR 13,384 is a quite different test from the limit for free family health insurance.
Free family insurance through a parent in the gesetzliche Krankenversicherung (German statutory health insurance) under § 10 SGB V ends when the child's total income exceeds EUR 565 a month (EUR 6,780 a year) in 2026. The child's investment income counts towards this. Income above this limit can jeopardise free family insurance and trigger contributions of the child's own, even where the income stays free of income tax. How the Sparerpauschbetrag is treated precisely in this is disputed: clarify the individual case with the responsible health insurer.
It is worth keeping these two limits cleanly apart. The tax-free threshold of around EUR 13,384 says nothing about whether family insurance is preserved. An account that throws off EUR 10,000 in income is free of income tax for the child, yet lies above the limit of EUR 6,780 and can thus cost the free co-insurance. Kindergeld (German child benefit) is not affected by this, since it has no longer depended on income since 2012. Later benefits such as BAföG, by contrast, can very much depend on the child's own income and assets.
Two further mistakes occur regularly. The first is the failure to renew the NV-Bescheinigung in good time: if it lapses unnoticed, the bank withholds tax again, and the income has to be reclaimed through the tax return. The second is graver and concerns the substance of the child's account: parents manage the assets as legal representatives, true, but the money belongs in law to the child. It is to be held in trust and tied to its purpose. If the parents use the account for their own ends, the tax office may, in some circumstances, attribute the income to them and let the tax advantages fall away. This depends on the individual case and is no automatic consequence, yet it shows that the child's account is no hidden parental account.
This article explains how the NV-Bescheinigung and the allowances involved work under current law. It is no substitute for individual tax or legal advice. Whether an NV-Bescheinigung makes sense, how investment income affects family health insurance, and how a child's account is run on a sound legal footing, you should clarify in the individual case with a tax adviser and, where relevant, with your health insurer.
Keep your child's investment income in view
Investboard shows the ongoing income in a child's account clearly, and helps you keep an eye on the thresholds for the Freistellungsauftrag, the NV-Bescheinigung and family health insurance.
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