--- title: "Vorabpauschale 2026: what ETF investors need to know" description: "Vorabpauschale 2026 explained simply: the current Basiszins, the calculation formula, how it interacts with the Sparerpauschbetrag, and practical tips for ETF investors." canonical: "https://investboard.de/en/wissen/vorabpauschale-2026" language: "en" published: "2026-03-27" modified: "2026-07-09" last_verified: "2026-07-27" jurisdiction: "DE" applicable_tax_years: "2024, 2025, 2026" author: "David Bartas" author_url: "https://investboard.de/ueber-uns" reviewer: "David Bartas" reviewed: "2026-07-27" --- # Vorabpauschale 2026: what ETF investors need to know Basiszins, calculation and practical tips on the Vorabpauschale for accumulating ETFs. ## In short 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. ## What is the Vorabpauschale? 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. ## Basiszins 2026 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 | 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. ## Calculation step by step ### Base return ```text Fund value on 01 Jan × Basiszins × 0.7 ``` ### Vorabpauschale (gross) ```text 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. ## A worked example 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 ```text 50,000 × 3.20 % × 0.7 = EUR 1,120 ``` ### Step 2: apply the cap ```text Gain of EUR 4,000 > base return of EUR 1,120 → EUR 1,120 stands ``` ### Step 3: partial exemption and tax ```text 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. ## Work out the Vorabpauschale yourself ## When the Vorabpauschale is lower or does not arise Three constellations limit the amount in practice: - **A loss year or sideways year:** if the fund value at the year's end is below or only just above the 1 January level, the Vorabpauschale is capped at the actual gain, in a loss year at zero. - **Distributing funds:** distributions are deducted from the base return. If a fund distributes more than the base return, no Vorabpauschale arises. That is why it is mainly a topic for accumulating funds. - **In-year purchases:** whoever buys shares during the year pays proportionally: for each full month before the purchase, the amount is reduced by one twelfth. ## Sparerpauschbetrag and the Vorabpauschale 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 is not an additional tax but an advance one. What you pay today, the tax office credits back on the later sale. ## Common misconceptions - **"I pay twice."** No: Vorabpauschale amounts already taxed reduce the taxable gain on sale (Section 19 InvStG). The custodian bank applies the credit automatically. - **"The tax comes out of the fund."** No: the debit comes from the settlement account. If it is not covered, banks may, depending on the institution, sell units or let the account go negative; a covered account in early January avoids both. - **"Church-tax payers pay 26.375%."** With church tax the effective rate rises to roughly 27.82% (8% church tax) or 28.00% (9%). ## Practical tips - Keep enough cash on the settlement account in January - Review your Freistellungsauftrag at the year's end and reserve a share for the Vorabpauschale - With several accounts: raise the exemption orders where the accumulating ETFs sit - Vorabpauschalen already paid are credited on the later sale: no double taxation ## Frequently asked questions ### When does the Vorabpauschale 2026 fall due? The Vorabpauschale for the 2026 tax year is debited from your settlement account in early January 2027. ### How high is the Basiszins for 2026? 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. ### Does the Vorabpauschale also apply to distributing ETFs? Yes, but only when the distributions are smaller than the base return. The Vorabpauschale is reduced by distributions already received. ## Sources - [Basiszins zur Berechnung der Vorabpauschale zum 2. Januar 2026 (BMF-Schreiben)](https://www.bundesfinanzministerium.de/Content/DE/Downloads/BMF_Schreiben/Steuerarten/Investmentsteuer/2026-01-13-basiszins-berechnung-vorabpauschale.html) · Bundesministerium der Finanzen - [InvStG § 18 Vorabpauschale](https://www.gesetze-im-internet.de/invstg_2018/__18.html) · Bundesministerium der Justiz - [InvStG § 20 Teilfreistellung](https://www.gesetze-im-internet.de/invstg_2018/__20.html) · Bundesministerium der Justiz - [Investmentsteuergesetz (InvStG) § 2 Begriffsbestimmungen (Aktienfonds: mehr als 50 Prozent)](https://www.gesetze-im-internet.de/invstg_2018/__2.html) · Bundesministerium der Justiz - [EStG § 32d Gesonderter Steuertarif für Einkünfte aus Kapitalvermögen](https://www.gesetze-im-internet.de/estg/__32d.html) · Bundesministerium der Justiz - [Basiszins zur Berechnung der Vorabpauschale (Zeitreihe der BMF-Schreiben)](https://www.haufe.de/steuern/finanzverwaltung/18-abs-4-invstg-basiszins-zur-berechnung-der-vorabpauschale_164_481896.html) · Haufe