Freistellungsauftrag Explained: A Guide for Expats in Germany
How the German tax exemption order uses your existing saver allowance at a withholding institution—and what changes when you use several providers, an ETF or a foreign broker.
Law and procedures checked 13 October 2026 · General information, not individual tax advice.
In four points
What it is, who uses it and what it cannot do
What it is
A prescribed instruction under §44a EStG that can stop or reduce German withholding up to the amount stated.
What it covers
Relevant interest, dividends, securities gains and taxable fund income processed by that withholding institution.
Who can use it
Generally a creditor with unlimited German income-tax liability, a German IdNr. and an institution able to process the order.
What it does not do
It does not create additional allowance, exempt every foreign account, erase losses or settle treaty and relocation questions.
Missing an order does not automatically destroy the statutory allowance. Tax may first be withheld, but a provider correction or later assessment may be possible under the applicable timing, evidence and filing rules. That is not an automatic refund promise.
Two separate concepts
Sparer-Pauschbetrag versus Freistellungsauftrag
Section 20(9) EStG provides the Sparer-Pauschbetrag: currently €1,000 for an individual, or €2,000 jointly for spouses assessed together. The EStG spouse rules also apply to registered civil partners.
The Freistellungsauftrag is the operational instruction sent to a withholding institution. It determines how much of the already available allowance that institution may use before withholding.
What the order cannot increase
- Your total statutory allowance
- The amount still unused elsewhere
- Your relevant net capital income
- Your eligibility after a residence-status change
Amounts stated across institutions should therefore not exceed what is actually available.
Eligibility
Tax residence matters more than nationality
Individual order
For a private investor within the §44a scope, the maximum allocation is bounded by the individual €1,000 allowance and any amount already allocated or used elsewhere.
Joint order
Jointly assessed spouses or registered civil partners can use the €2,000 joint amount. A joint order requires both German IdNr. values. Account ownership and provider support still matter.
No opening guarantee
Being resident and tax-liable in Germany does not compel a bank or broker to accept an application or every account type. Provider onboarding and compliance checks remain separate.
Section 1 EStG generally connects unlimited income-tax liability to a residence or habitual abode in Germany. Citizenship alone is not the tax-residence test. Dual residence, split years and treaty tie-breakers require facts beyond this guide.
Identification
IdNr., Steuernummer and foreign TIN are not interchangeable
German IdNr.
The eleven-digit personal identification number issued through the BZSt system. It is permanent and is the identifier required by §44a for a Freistellungsauftrag.
Steuernummer
A local tax-office file/reference number. It is issued when needed, can change and a person can have several. It is not the German IdNr. required for this order.
Foreign TIN
A tax identifier issued by another jurisdiction. Banks may request it for tax-residence reporting. It does not replace the German IdNr. required for a German Freistellungsauftrag.
Send identifiers only through your institution’s official secure channel or to the competent authority. Finanz2Go does not request or collect tax IDs, account statements or tax documents.
Which income can use the allocated amount?
Within the institution’s German withholding process, the order can affect relevant interest, dividends, realised securities gains and taxable fund income. Loss-offset pots and statutory fund partial exemptions may be applied before the remaining allowance is used.
The allocation is not “per trade” and not a separate exemption for each bank. It applies across relevant capital income and all institutions combined.
ETFs and the Vorabpauschale
Distributions, taxable disposal gains and a Vorabpauschale can consume available allowance after applicable fund rules. The order does not change the statutory advance amount; it can affect whether the remaining taxable amount produces withholding.
Read the ETF tax guide for the fund calculation and timing.
Example 1
Split €1,000 across two institutions
Assumptions: one German tax-resident individual; the full €1,000 remains available; no other orders; expected relevant capital income is €600 at Bank A and €400 at Broker B.
| Institution | Expected relevant income | Order |
|---|---|---|
| Bank A | €600 | €600 |
| Broker B | €400 | €400 |
| Total | €1,000 | €1,000 |
The orders equal the available amount. If the income mix changes, one institution can still withhold while another allocation remains unused. The legal allowance is not lost merely because the operational split was imperfect, but correction may require action.
Example 2
Adjust after €450 has already been used
Assumptions: the same individual and calendar year; Bank A has an order of €700 and has already used €450; Broker B has €300; no other orders.
Before
- Bank A order: €700
- Bank A used: €450
- Broker B order: €300
- Total orders: €1,000
Permitted lower boundary
The BMF guidance allows a reduction only down to the amount already used during the current year. Bank A therefore cannot be reduced below €450 in this example.
Intended new allocation
- Bank A: €450
- Broker B: €550
- Total: €1,000
Submit changes through each provider’s official process and verify both acknowledgements. Sequence, cut-off time and recalculation are provider-specific; the arithmetic does not guarantee operational acceptance.
Setup and changes
Use the provider’s official route
The law and BMF guidance define the tax framework; each institution defines its secure interface and processing window. A bank may offer online banking, an app or a prescribed document. Do not treat one provider’s clicks as a universal workflow.
The BMF guidance permits a first or increased order for the current year no later than 31 January of the following year under its administrative rule. Providers can impose earlier operational cut-offs, so submit and verify promptly rather than relying on the outer legal date.
Reduction and revocation
Used amounts constrain changes
A current-year reduction cannot go below the amount already used. A time limit or revocation takes effect within the calendar-year framework; provider handling on closure and year-end can differ.
Keep the confirmation, displayed amount, used amount and annual tax documents. A click without a readback is not evidence that the intended allocation became effective.
If the order was missing or too low
A German institution may have withheld capital-income tax because no valid amount was available. If you add or increase an order within its correction window, it may perform a tax recalculation. Trade Republic, Scalable Capital and ING each publish digital procedures, but their timing and mechanics are provider-specific.
If institutional correction is unavailable or the year is closed, §32d(4) provides an assessment route to request verification of withholding. Whether tax is refunded depends on the complete income, allowance already used, certificates and filing facts.
No automatic refund promise
A missing order does not automatically mean the allowance is permanently lost. It also does not guarantee a refund. Preserve annual tax certificates, gross income, tax withheld, used allowance and foreign-tax data, and check the applicable return requirements.
The German capital gains tax calculator is only a simplified scenario model; it is not a filing or refund calculator.
Different instrument
Non-assessment certificate (NV-Bescheinigung)
An NV certificate is not a larger Freistellungsauftrag. Under §44a, it is issued by the competent residence tax office where the statutory conditions indicate that no income tax will arise, subject to revocation.
Its validity may be no longer than three years and must end at a calendar-year end. Eligibility depends on the full expected income and assessment position, not just investment income or expatriate status.
Joint orders
Allocation and cross-spouse processing
A joint order uses the joint allowance only for taxpayers entitled to joint assessment and requires both IdNr. values. A provider may also use a joint order for institution-level cross-spouse loss offset under its process.
That operational feature does not combine losses held at unrelated institutions or replace an assessment where cross-bank certificates and other facts matter.
Foreign brokers
No universal German order function
A foreign broker may not be a German withholding agent and may not accept a German Freistellungsauftrag, maintain German loss pots or issue a German tax certificate. In that case the allowance is generally handled through the German assessment of reportable capital income rather than through that broker’s interface.
Do not assume that a translated “tax exemption” feature implements §44a EStG.
Moving away
Re-check residence and provider status
A move can end unlimited German income-tax liability, create a split tax year or change the institution’s withholding classification. Inform providers and check the effective date, open orders, used allowance and annual documents.
Do not promise continued eligibility or worldwide portability. The general broker comparison and direct comparison document provider-specific mobility limits.
Practical checklist
Six checks before relying on the order
- Check eligibility and your total available allowance.
- List existing orders and amounts already used.
- Estimate relevant capital income without treating it as guaranteed.
- Allocate amounts without exceeding the available total.
- Submit through each provider’s official secure route.
- Verify confirmations, used amounts and annual tax documents.
Keep one annual evidence file
Record institution, order amount, effective period, used amount, changes and confirmation date. Reconcile that list with annual certificates and any foreign-account reporting.
Never send your German IdNr., foreign TIN, account statements or tax documents to Finanz2Go. This page has no form, upload or advice intake.
For the wider rules, use the capital gains tax guide.
Official and operational sources
Law first, provider process second
Checked 13 October 2026. Provider pages illustrate implementation only; they do not replace the statutory rule.
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