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Germany tax guide 2026
Germany pairs a smooth progressive income tax — rates glide from 14% to 45% rather than jumping in steps — with a simple flat 25% on investment income and famously generous income splitting for couples. The catch is what sits alongside: nearly 21% employee social insurance, a solidarity surcharge for higher earners, and church tax for registered members.
- Rate range
- 0% – 45% (+5.5% solidarity surcharge for higher earners)
- Key allowance
- €12,348 basic allowance (€24,696 for couples) — nothing is taxed below it
- Tax year
- Calendar year
- Filing deadline
- 31 July following the year (end of February of the second year with an adviser)
Taxes covered
- Income tax45%
Progressive glide from 14% to 42% at €69,879, 45% above €277,825; solidarity surcharge adds 5.5% of the tax for higher earners.
- Dividend tax26.375%
Flat 25% withholding plus the solidarity surcharge = 26.375% final; €1,000 saver's allowance; lower earners can opt for their own rate.
- Capital gains tax26.375%
Shares: flat 26.375% regardless of holding period. Property: taxable within 10 years, tax-free after (or as your own home).
- Crypto tax0% / up to 45%
Private crypto held over 1 year: tax-free. Sold within a year: progressive rates, but only if total private gains reach €1,000.
- Social security~21%
Employee side: 9.3% pension + ~8.75% health + 1.3% unemployment + 1.8% care, each on capped bases — roughly 21% below the ceilings.
- Inheritance tax7–50%
Progressive by relationship and amount: spouses get €500,000 and children €400,000 tax-free per parent, then 7–30%; strangers face 30–50%.
- Withholding tax26.375%
Dividends to non-residents: 26.375% at source, treaty-reducible; no withholding on ordinary bank interest; royalties 15.825%.
Special regimes
- Income splitting for couples
Joint filers are taxed as if each earned half — worth thousands a year when incomes differ.
- Crypto: tax-free after one year
Private crypto held over 12 months is exempt from tax entirely — one of Europe's cleanest holding-period rules.
- Property: tax-free after ten years
Privately held real estate escapes tax after a 10-year holding period (or when it was your own home).
- Active pension
From 2026, people past retirement age can keep working and earn up to €2,000 a month tax-free.
Recent changes
- 2026-01Basic allowance rose to €12,348; child benefit to €259 a month; the solidarity-surcharge exemption limit to €20,350 of tax.
- 2026-01The new active-pension regime lets people past retirement age earn €2,000 a month tax-free from continued work.