The tax exemption order allows you to avoid paying taxes on capital gains up to a specific amount (1,000 EUR or 2,000 EUR for spouses). Only users registered under Trading 212 FXFlat with tax residence in Germany can benefit from the feature.
How does it work?
When you close a CFD position and make a profit, Trading 212 automatically deducts taxes. However, if your cumulative profits are below your exemption limit, those profits will be tax-free.
đź’ˇ Example
- Profit of 1,000 EUR: You use up 100% of your exemption. Future profits will be taxed.
- Loss of 500 EUR: Your exemption is refilled back to 500 EUR.
- Profit of 600 EUR: You use up the remaining 500 EUR of your exemption. Taxes are applied to the remaining 100 EUR.
How do I create an exemption order?
- Go to Settings
- Select Tax overview
- In the exemption section, click on Set up now
- Choose if you want to set up a single or joint exemption order
- Choose the amount
- Select whether you wish to auto-renew the order every year so it does not expire
- Confirm
What is the joint exemption order?
If you’re married and file your taxes jointly, you can apply for a total combined amount of 2,000 EUR as a couple by providing your spouse’s details:
- First and Last Name
- Date of Birth
- Tax ID
For joint exemption orders, you can create an exemption amount of 0 euros. In this case, no gains will be exempt from taxation and we will activate the cross-spouse loss offsetting process for your accounts. This process occurs once a year, after the tax year ends, and allows jointly assessed couples to offset the losses of one partner with the gains of the other. If you set up any amount greater than 0 euros, the cross-spouse offsetting automatically takes place.
How can I change my exemption order?
- Go to the Tax overview
- Select Manage in the exemption order section
- Change the maximum exemption amount, the type of exemption order or toggle auto-renew
When changing an exemption order, you can not reduce the amount below the value that you have already used during this tax year.
đź’ˇ Example
- You have initially created an exemption of 500 EUR
- You have used 100 EUR by realizing profits
- The minimum amount is 100 EUR for changing your exemption for this tax year.
If you have a joint exemption and switch to a single exemption order, then your joint exemption will be active until the end of this tax year. Starting in the following year, your single exemption will be used instead.