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Basiszins, calculation and practical tips on the Vorabpauschale for accumulating ETFs. How the 2026 base rate affects tax on accumulating ETFs.
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The Vorabpauschale is Germany's annual minimum tax on accumulating ETFs and funds. For 2026 the Basiszins (statutory base rate) is 3.20%, the highest since the 2018 reform. Equity ETFs get a 30% partial exemption; a worked example shows roughly EUR 207 of tax on a EUR 50,000 holding, debited in early January 2027 and credited on a later sale.
The Vorabpauschale is a minimum taxation for accumulating ETFs and funds (Section 18 InvStG)
The Basiszins for 2026 is 3.20 %, the highest since the reform was introduced
A 30 % Teilfreistellung on equity-fund ETFs lowers the effective tax burden
Vorabpauschalen are credited on a sale: no double taxation
The Vorabpauschale is Germany's annual minimum tax on accumulating ETFs and funds. For 2026 the Basiszins (statutory base rate) is 3.20%, the highest since the 2018 reform. Equity ETFs get a 30% partial exemption; a worked example shows roughly EUR 207 of tax on a EUR 50,000 holding, debited in early January 2027 and credited on a later sale.
The Vorabpauschale is a minimum taxation for accumulating ETFs and funds (Section 18 InvStG)
The Basiszins for 2026 is 3.20 %, the highest since the reform was introduced
A 30 % Teilfreistellung on equity-fund ETFs lowers the effective tax burden
Vorabpauschalen are credited on a sale: no double taxation
Most taxes arise when money moves: on a sale, on a distribution. The Vorabpauschale (Germany's advance lump-sum tax on accumulating funds) is the exception. It falls due while the shares still rest and the fund has paid out nothing.
For many investors this is the first tax that seems to come from nowhere. Yet it follows a clear logic, and whoever understands it passes through the turn of the year more calmly: with the right amount on the settlement account and an exemption order that often absorbs the deduction entirely.
A tax on a gain that is not yet in the account asks for a plan, not a surprise in January.
The Vorabpauschale (Section 18 InvStG) is an annual minimum taxation for accumulating ETFs and investment funds. Introduced with the 2018 investment-tax reform, it makes sure that investors pay tax even when the fund makes no distributions and the shares are not sold.
The background: before 2018, investors in accumulating funds could let gains compound for decades without annual tax; the tax fell due only on sale, a considerable deferral advantage over distributing funds. The Vorabpauschale limits that advantage: each year a notional minimum return is assessed and taxed. On a later sale, the Vorabpauschale amounts already taxed are deducted from the taxable gain (Section 19 InvStG), so nothing is taxed twice.
The Vorabpauschale concerns only investment funds and ETFs. Single stocks are not affected: tax falls due only on a sale or on dividend distributions.
The Basiszins (base rate) is the calculation rate of the Vorabpauschale. It is derived from the yield of long-dated German government bonds (Bundesbank yield-curve data) and published by the Federal Ministry of Finance at the start of each year in a BMF circular (Section 18(4) InvStG).
| Year |
|---|
The Vorabpauschale for the 2026 tax year is debited from your settlement account in early January 2027.
The Basiszins for 2026 is 3.20 %. It is derived from the yield of long-dated German government bonds and published each year by the Federal Ministry of Finance in a BMF circular.
Yes, but only when the distributions are smaller than the base return. The Vorabpauschale is reduced by distributions already received.
| Basiszins |
|---|
| Base-return factor (70 %) |
|---|
| 2024 | 2.29 % | 1.60 % |
| 2025 | 2.53 % | 1.77 % |
| 2026 | 3.20 % | 2.24 % |
The higher the Basiszins, the higher the Vorabpauschale turns out. The 2026 value is the highest since the reform was introduced: a portfolio that triggered practically no Vorabpauschale through the zero-rate years can see a noticeable deduction in January 2027.
Base return
Fund value on 01 Jan × Basiszins × 0.7
Vorabpauschale (gross)
Minimum of (base return − distributions) and (actual gain in value)
Two limits are built in. First: the Vorabpauschale is never higher than the year's actual gain in value. Second: it can never be negative. In a loss year, no Vorabpauschale arises at all; no loss carry-forward arises from it either.
For equity-fund ETFs (more than 50% equity share, Section 2 (6) InvStG), a 30% Teilfreistellung (partial exemption, Section 20 InvStG) is then deducted; for mixed funds it is 15%. On the remaining taxable amount, Abgeltungsteuer (flat tax) and Solidaritätszuschlag (solidarity surcharge) fall due, together 26.375% without church tax.
An accumulating equity ETF, fund value on 1 January 2026: EUR 50,000. At the year's end the account shows EUR 54,000; nothing was distributed.
Step 1: base return
50,000 × 3.20 % × 0.7 = EUR 1,120
Step 2: apply the cap
Gain of EUR 4,000 > base return of EUR 1,120 → EUR 1,120 stands
Step 3: partial exemption and tax
1,120 × (1 − 30 %) = EUR 784 taxable 784 × 26.375 % = EUR 206.78 tax
Roughly EUR 207 is debited from the settlement account at the start of January 2027, unless an exemption order covers the amount. For perspective: that is a good 0.4% of the portfolio value, brought forward against the later sale tax, not added on top of it.
Tax Year
Vorabpauschale (gross)
EUR 224,00Estimated Tax
EUR 0,00Three constellations limit the amount in practice:
The Vorabpauschale is ordinary investment income and is set against the Sparerpauschbetrag (annual saver's allowance, EUR 1,000 for individuals, EUR 2,000 for jointly assessed couples). In the example above, a sufficient exemption order would prevent the deduction entirely: EUR 784 of taxable amount sits below the allowance.
There is a second side to this: what the Vorabpauschale uses up in January is no longer available for dividends and sales through the rest of the year. Whoever holds several accumulating ETFs should plan the expected Vorabpauschale into the split of the Freistellungsauftrag (exemption order).
Build a buffer for the Vorabpauschale into your Freistellungsauftrag, especially if you hold several accumulating ETFs. Without an exemption order, overpaid tax can be reclaimed through the tax return (Anlage KAP).
The Vorabpauschale in view
Investboard estimates the Vorabpauschale to expect on your accumulating ETFs and shows how much of your allowance it claims, before the turn of the year arrives.
View the Vorabpauschale →