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German Advance Lump-Sum Tax Calculator (Vorabpauschale)

German Vorabpauschale model using a year-specific reference rate, appreciation cap, distributions and partial exemption.

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Inputs

Enter values

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€

Value of fund shares on January 1 of the tax year.

€

Value of fund shares on December 31 of the tax year.

€

Received distributions in the tax year (reduce the advance lump sum).

€

Remaining allowance for this fund.

Load example

For illustration only – your own calculation is what counts.

Explanation

How German Advance Lump-Sum Tax Calculator (Vorabpauschale) works

What is the advance lump sum?

The advance lump sum was introduced with the Investment Tax Act (InvStG) 2018 and ensures annual minimum taxation for investment funds. It particularly affects accumulating funds that make no distributions. Taxation is based on a notional return (base return) oriented to the risk-free market rate.

How the calculation works

The base return is calculated from the fund value at the start of the year, multiplied by the base rate published annually by the Federal Ministry of Finance and the factor 0.7. The advance lump sum is then the difference between base return and distributions, capped by the actual fund appreciation. After deducting the partial exemption, capital gains tax (plus church tax if applicable) is calculated on the remaining amount.

Advance lump sumAdvance lump sum = max(0, min(base return - distributions, actual gain))

The advance lump sum can never be negative and is capped by the actual gain.

Knowledge

Base return calculation

The base return is the computational foundation of the advance lump sum.

The base return is derived from the fund value at the start of the year, multiplied by the base rate and the factor 0.7. This factor is intended to approximate the risk-free return after costs.

Base returnBase return = Fund value_Start × Base rate × 0,7

The factor 0.7 reduces the theoretical risk-free return by a flat 30%.

The advance lump sum before partial exemption is then: max(0, min(Base return - Distributions, actual gain)). It is capped by the actual gain.

Knowledge

Partial exemption

The partial exemption compensates for fund-level taxation on a flat-rate basis.

Since the InvStG 2018, certain income is taxed at the fund level. To avoid double taxation, investor income is partially exempted. The level depends on the fund type.

  • Equity funds (>= 51% equity share): 30% partial exemption
  • Mixed funds (>= 25% equity share): 15% partial exemption
  • Bond funds and other: 0% partial exemption
  • Real estate funds (domestic): 60% partial exemption
  • Real estate funds (foreign): 80% partial exemption

Practice

Practical examples

For illustration only – your own calculation is what counts.

Equity fund with capital gain

An equity fund rises from EUR 50,000 to EUR 55,000. The rate is loaded for the selected year from reference data.

Result: The base return is EUR 1,120.00. After 30% partial exemption, tax is due on the remaining advance lump sum.

Mixed fund with distribution

A mixed fund rises from EUR 30,000 to EUR 31,500 and distributes EUR 200. The rate comes from reference data.

Result: Distributions reduce the base return. The advance lump sum is calculated with 15% partial exemption.

Fund with loss (no advance lump sum)

An equity fund had EUR 40,000 at the start of the year and only EUR 38,000 at year end. No advance lump sum applies.

Result: Since the fund suffered a loss, the actual gain is negative. The advance lump sum is EUR 0.

Notes

Common mistakes

  1. Confusing advance lump sum with disposal gain tax

    The advance lump sum is not an additional tax but a prepayment on future disposal gains. It is credited upon sale. Adding both overestimates the total tax burden.

    The advance lump sum is credited upon disposal — it is a prepayment, not an additional tax.

  2. Forgetting partial exemption in the calculation

    Equity funds receive 30% partial exemption, mixed funds 15%. Forgetting the partial exemption calculates too high an advance lump sum. The partial exemption applies automatically — you don't need to apply for it.

    Select the correct fund type in the calculator so the partial exemption (30% equity, 15% mixed) is automatically applied.

  3. Confusing the base rate with the BGB base interest rate

    The base rate for the advance lump sum (Section 18 InvStG) and the base interest rate per Section 247 BGB (for late payment interest) are different values with different calculation methods. They are published separately by the BMF and the Bundesbank respectively.

    For the advance lump sum, use the base rate published annually by the BMF, not the BGB base interest rate.

FAQ

Frequently asked questions

What is the advance lump sum?

The advance lump sum is an anticipatory taxation of fund shares that has applied since the Investment Tax Act (InvStG) 2018. It ensures that even accumulating funds are subject to annual minimum taxation, even without distributions. The advance lump sum is deducted from the allowance or settlement account at the beginning of the following year. Upon sale of fund shares, previously paid advance lump sums are credited against gains to avoid double taxation.

When does the advance lump sum apply?

The advance lump sum applies when the fund achieved a positive actual gain during the year AND the base return is greater than received distributions. If the base rate is negative or zero (as in 2020-2022), no advance lump sum applies. No positive capital gain: advance lump sum = 0. Distributions >= base return: advance lump sum = 0. Base rate <= 0: advance lump sum = 0.

What is the partial exemption for funds?

The partial exemption is a flat tax deduction intended to compensate for fund-level taxation. A portion of taxable income remains tax-free: Equity funds (at least 51% equity share): 30% partial exemption. Mixed funds (at least 25% equity share): 15% partial exemption. Bond funds and other funds: 0% partial exemption.

What is the base rate for the advance lump sum?

The calculator loads the rate versioned for the selected tax year and displays its source and validity.

When is the advance lump sum zero?

The advance lump sum is zero euros in the following cases: The fund made a loss during the year (actual gain <= 0). The base rate is zero or negative (as in 2020 to 2022). Distributions exceed the base return.

Is the advance lump sum credited upon sale?

Yes. Previously paid advance lump sums are credited upon sale of fund shares and deducted from the taxable disposal gain. This avoids double taxation. The custodian bank maintains an account of cumulative advance lump sums.

Does the calculator include previously assessed advance lump sums?

No. Prior-year amounts and cross-depot offsetting are not engine inputs.

Is the saver's allowance considered for the advance lump sum?

Yes. The advance lump sum is first offset against the remaining saver's allowance (EUR 1,000/person). Only the excess amount is actually taxed. With small portfolios and sufficient allowance, no tax is often due.

Limits

Limitations

  • Base rate can change annually: The calculation applies only to the selected tax year. Future advance lump sums depend on the then-applicable base rate.
  • No loss offsetting modeled: In practice, the advance lump sum can be offset against losses from other capital investments.
  • Simplified tax calculation: Individual tax situations (NV certificate, loss carryforwards) may lead to different results.
  • Real estate funds not separately modeled: Real estate funds have partial exemptions of 60% (domestic) or 80% (foreign), which are not offered here.
  • Acquisition-year reduction is excluded because no acquisition month is entered.
  • Prior-year amounts and cross-depot offsetting are not tracked.

Sources

Sources and references

  • § 18 InvStG — VorabpauschaleBundesministerium der Justiz

    Central legal basis for the advance lump sum: definition, calculation, and crediting upon disposal.

    View sourceRetrieved: 07/30/2026 · Verified on: 07/30/2026 · Primary source
  • § 20 InvStG — TeilfreistellungBundesministerium der Justiz

    Section 20 InvStG governs partial exemptions for equity and mixed funds.

    View sourceRetrieved: 07/30/2026 · Verified on: 07/30/2026 · Primary source
  • § 18 Abs. 4 InvStG — BasiszinsBundesministerium der Justiz

    The base rate is published annually by the BMF and is derived from the yield of long-term federal bonds.

    View sourceRetrieved: 07/30/2026 · Verified on: 07/30/2026 · Primary source
  • BMF — Veröffentlichung des BasiszinsesBundesministerium der Finanzen

    Official annual announcement; the concrete value is loaded from reference data.

    View sourceRetrieved: 07/30/2026 · Verified on: 07/30/2026 · Primary source

Knowledge