Vorabpauschale calculator (German ETF tax)

How it calculates

The Vorabpauschale exists because accumulating funds pay nothing out, so without it their income would only be taxed when you sell. § 18 of the Investment Tax Act sets a minimum each year:

Basisertrag = value on 1 January × Basiszins × 70 %

Vorabpauschale = min(Basisertrag, gain in the year + distributions) − distributions, at least 0

The Basiszins is published by the Federal Ministry of Finance each January from Bundesbank bond yields: 2.29% for 2024, 2.53% for 2025 and 3.2% for 2026. Then come four steps:

1. Purchases during the year count from the month you bought: for every full month before the purchase, the Vorabpauschale drops by one twelfth.
2. Teilfreistellung: 30 % is tax-free for equity funds, 15 % for mixed funds.
3. Sparer-Pauschbetrag: the bank sets what is left of your Freistellungsauftrag against the rest.
4. Tax: 25 % plus 5.5 % solidarity surcharge, 26.375% together, or about 28% with 9 % church tax.

The Vorabpauschale counts as received on the first working day of the following year, and the bank debits the tax from your account in January. No money leaves the fund.

Example: an equity ETF in 2026

The ETF was worth €24,000 on 1 January 2026 and €25,920 at the end of the year. The Basisertrag is €24,000 × 3.2% × 70 % = €537.60. The fund gained more than that, so the Vorabpauschale is the full €537.60. After the 30 % Teilfreistellung, €376.32 is taxable, and without an allowance left the bank debits €99.25 in January 2027. With 9 % church tax it would be €105.35.

Had the fund gained only 1 %, the Vorabpauschale would be capped at that gain: €240.00, and the tax €44.31.

If you started this year instead, with €12,000 bought in April, three full months are missing: €201.60 of Vorabpauschale, €37.22 of tax.

Will my allowance cover it?

Usually, for moderate amounts. The Vorabpauschale for 2026 counts as income on the first working day of 2027, so the bank sets it against your Freistellungsauftrag for 2027, before most of that year’s interest and dividends. €1,000 covers the Vorabpauschale on about €63,776 held all year in an equity ETF. The catch is where the Freistellungsauftrag sits: if you split it across several banks, the bank with your ETFs only has its share. Enter that share above to see what is left over.

Accumulating or distributing?

The Vorabpauschale matters most for accumulating ETFs, which reinvest everything. A distributing ETF pays out dividends, and those are taxed when they arrive, with the same Teilfreistellung and allowance. The payouts are deducted from the Vorabpauschale, so a fund that distributes at least the Basisertrag has none. Over a full year the total tax is similar either way; what differs is the timing and how much stays invested. This calculator handles both: enter the year’s distributions under “Purchases, distributions, tax details”.

What if the account is empty in January?

The bank takes the tax from the current or clearing account linked to your securities account. It does not sell fund units for it. If there is not enough money and no overdraft, the bank cannot withhold the tax and must report this to the tax office, and you then declare the income in your tax return. Keeping the expected amount in the account in early January avoids the paperwork.

Is the Vorabpauschale taxed twice?

No. Every Vorabpauschale is deducted from the gain when you sell the units (§ 19 InvStG), at its full amount before Teilfreistellung. It moves part of the tax forward; it does not add to it. The ETF savings plan calculator shows the effect over a whole savings plan.

What it can’t see

It works with one fund and one purchase. Your bank adds up all funds and offsets losses in your loss pot first, which can bring the tax to zero. It does not apply a lower personal tax rate (Günstigerprüfung), which you can claim in your tax return. A full Zenarios plan shows what the yearly tax and the rest of your finances mean for your goals.

Common questions

What is the Vorabpauschale?

A minimum amount of fund income that Germany taxes each year in advance, mainly for accumulating funds that pay nothing out. It is the value on 1 January × the Basiszins × 70 %, capped at what the fund gained that year, less any distributions (§ 18 InvStG).

How much tax is due on €10,000 in an equity ETF for 2026?

If the ETF gained at least €224 in 2026: Vorabpauschale €10,000 × 3.20 % × 70 % = €224, of which 30 % is tax-free, so €156.80 is taxable and the tax is €41.36 without church tax. With an unused Sparer-Pauschbetrag, nothing is debited.

When is the tax debited?

The Vorabpauschale counts as received on the first working day of the next year: 2 January 2026 for 2025 and 4 January 2027 for 2026. Banks debit the tax from your account in January.

Up to what amount does the allowance cover it?

For 2026 and an equity ETF that gains at least the Basisertrag, €1,000 of allowance covers the Vorabpauschale on about €63,800 held all year; €2,000 covers about €127,600. It only works with the share of your Freistellungsauftrag that sits at the bank holding the ETF.

Is there a Vorabpauschale if my ETF lost value?

No. The Vorabpauschale is capped at the year's gain plus distributions. If the fund fell over the year, it is zero.

Sources

• § 18 InvStG: Vorabpauschale
• § 20 InvStG: Teilfreistellung
• § 32d EStG: flat tax and church tax
• BMF letter of 13 January 2026: Basiszins 3.20 %
• BMF letter of 10 January 2025: Basiszins 2.53 %
• BMF letter of 5 January 2024: Basiszins 2.29 % (Haufe)
• Amundi: Vorabpauschale 2023, customer information with a worked example
• MLP Banking: worked examples of the Vorabpauschale 2025

By Constantin Metz, the maker of Zenarios · Reviewed 25 October 2026. Results are estimates from your inputs and simplified rules, not financial, tax or legal advice. How Zenarios calculates