Partial exemption (Teilfreistellung)
Part of the income from funds and ETFs stays tax-free in Germany, 30 % for equity ETFs.
In short
As of 8 October 2026The partial exemption makes part of the income from funds and ETFs tax-free in Germany, because funds already pay tax on some income themselves. For equity funds with at least 51 % stocks it is 30 %, for mixed funds 15 %, for real estate funds 60 or 80 %. It covers distributions, the advance lump-sum tax and sale gains. Bond and money market ETFs get none.
In Germany, funds already pay tax on some income themselves. To compensate, part of your income from them is tax-free: the partial exemption (Teilfreistellung). It applies to distributions, the advance lump-sum tax and gains when you sell.
The rate depends on the fund type: equity funds with at least 51 % stocks 30 %, mixed funds with at least 25 % stocks 15 %, real estate funds 60 % (80 % if mainly foreign property). Bond and money market ETFs get none. Individual stocks, ETCs and ETNs get none.
Example: you sell an equity ETF with a 1,000 euro gain. Only 700 euros are taxable, subject to capital gains tax once your allowance is used up. More in the topic Vorabpauschale 2027 and the chapter on taxes on stocks.
Related terms
Sources
- Investmentsteuergesetz (InvStG), § 20 Teilfreistellung
- Investmentsteuergesetz (InvStG), § 2 Begriffsbestimmungen
As of 8 October 2026 · Educational content, not investment or tax advice.