German Withholding Tax

The German flat rate withholding tax or Abgeltungssteuer is a withholding tax on private income from capital and capital gains. This flat rate withholding tax came effective on the 1st of January 2009. The Naqoda Withholding Tax Calculation Engine is a software solution for automated calculation and preparation of interest income tax and capital gains tax according to article 20 EStG, article 22 section 2 EStG, in combination with article 23, paragraph 1, section 1, clause 2 through 4 EStG of the German Tax Law (Einkommenssteuergesetz). This allows a financial institution to meet the reporting requirements for capital gains and interest income reports (Jahresbescheinigung).

Features include:

  • Calculation of taxable basis for:
    • interest income transactions
    • mutual fund buy & sell transactions, fund distribution & accumulation with coverage of both foreign and domestic funds
    • equities buy & sell transactions
    • bonds buy & sell transactions
    • FX and FX swap transactions
  • Calculation using exemption rules of exoneration amount (Freistellungsauftrag), share & other loss compensation balance and foreign source compensation balance
  • Calculation of capital gains tax (Kapitalertragsteuer), church tax (Kirchensteuer) and solidarity surcharge (Solidaritatszuschlag)
  • Invididual clients, married couples, associations of individuals & companies
  • Management of clients static data including NV certificate, individual and joint exoneration amount, time restricted exoneration amount, percentage split for church tax
  • Management of in-year changes in clients static data
  • Management of securities static data including transparent & intransparent funds
  • Computation of securities FIFO chain
  • Support for backdated transactions & cancellations
  • Online user interface with realtime tax calculation simulation
  • Provision of data for monthly & yearly tax reports to authorities
  • Provision of data for yearly customer tax certificate (Jahressteuerbescheinigung) & income listing (Erträgnis Aufstellung)
  • Interface with data provider WMDaten