Understanding tax · Jurisdiction DE

Partial exemption as a concept

In Germany, part of the income from certain investment funds can stay tax-free (Teilfreistellung, a partial exemption). That is a legal concept. Finmon does not fill in a tax return.

In more detail

The idea: tax is already levied at fund level, so part is exempted at investor level. Whether and how much depends among other things on the fund type and on whether units sit in private or business assets. Educational frame, not a DIY form.

Background

Section 20 of the Investment Tax Act names a 30% partial exemption for equity funds in private assets; mixed and property funds have other rates. The Vorabpauschale (a statutory deemed income amount) and disposals follow the same frame. Educational, next check on 2027-10-27. Not a translation of UK capital-gains tax.

An example

A fund classed as an equity fund shows a gain. In Germany a part of that may drop out of the tax base through partial exemption. The exact return stays with the tax office or an adviser, not in Finmon.

A common misconception

I can complete Teilfreistellung in the app as if it were a tax return.

It is a German concept for the tax base. Finmon does not file.

Source: InvStG § 20 · Teilfreistellung. Last reviewed: 2026-10-27. Editorially reviewed on 2026-10-27. Next review 2027-10-27. Version 0.2.0. Finmon explains. It does not advise. Not investment, tax or legal advice.