Note: This article supplements our piece on Section 49 EStG and German withholding tax after emigration, which deals in detail with the ongoing German source tax on dividends, interest and fund distributions after a move abroad. The present article deliberately takes the other perspective: banking and custody practice. It focuses on whether and how the custodian bank terminates the securities account when you leave, what has to be borne in mind for tax purposes when the account is technically transferred abroad, and how the new exit tax that has applied since 2025 now also captures investment fund units.
Anyone emigrating from Germany first thinks of deregistering their residence, engaging a tax advisor and the new everyday life abroad – the existing securities account often becomes an afterthought. In practice, however, it frequently proves to be a problem area in its own right: many German banks and brokers end the business relationship as soon as a foreign residence becomes known. If the account is transferred abroad instead, significant tax disadvantages can arise without careful documentation. And since the Annual Tax Act 2024 (Jahressteuergesetz 2024), even an ordinary ETF or fund portfolio can trigger a stand-alone exit tax that was previously reserved for larger shareholdings in corporations. This article explains what investors should check and prepare concretely before leaving.
Will the Bank Terminate Your Securities Account When You Leave? The Practice of German Brokers
A German securities account does not, in and of itself, establish a German residence or unlimited tax liability. Whether a bank continues the business relationship after a move abroad is therefore initially not a tax question but a question of civil and regulatory law, which each institution decides under its own terms and conditions. In practice, banks regularly invoke several regulatory obligations: the KWG (German Banking Act) and the GwG (German Money Laundering Act) require continuous knowledge of the customer relationship, and the European financial markets directive MiFID II generally permits cross-border securities services in their existing form only within the EU internal market. If a customer moves to a third country, many institutions no longer have the regulatory basis to keep the account running unchanged.
How this plays out in practice depends largely on the destination country:
- Move within the EU or the EEA: An existing German securities account can in the vast majority of cases be continued without difficulty, because the European passporting principle applies. Some institutions nevertheless still require a German residence – this must be clarified individually before the move.
- Move to a third country outside the EU/EEA: Many German brokers and neobrokers actively terminate the business relationship here or demand that the account be closed within a period set by the institution. Internationally oriented brokers handle this inconsistently; some continue to serve customers in certain third countries, others do not.
- Move to the USA: A special rule applies here. Because of the US reporting obligations under the Foreign Account Tax Compliance Act (FATCA), practically all German brokers refuse to continue accounts of US-resident persons – this also affects German nationals with a green card or US tax liability who do not live there.
If the business relationship is terminated, a period for closing or transferring the account normally remains. Investors should clarify this situation with their own bank not only after receiving the notice of termination but already in advance of the move – ideally by written enquiry whether, and under what conditions, the account can be continued at the planned new place of residence.
Transferring the Account Abroad: Not a Sale – But Not Without Pitfalls
The Basic Rule: A Transfer Without a Change of Creditor Is Tax-Neutral
Anyone who transfers their securities account, while remaining the owner, from a German custodian to a foreign one does not economically sell the securities – only the place of custody changes, not the ownership position. For tax purposes this is not an incidental point but is expressly regulated: under Section 43(1) sentence 4 EStG (German Income Tax Act), the transfer of an asset within the meaning of Section 20(2) EStG held by a paying agent is in principle deemed a disposal for the purposes of the withholding of capital gains tax – but this fiction is tied to a change of creditor, that is, a change of the economically entitled person. If the account holder remains the same and only the custodian changes, there is no change of creditor and therefore no fiction of a disposal. The mere transfer of one’s own securities account abroad therefore does not, in itself, trigger German capital gains tax.
The position is different if the owner changes at the same time as the transfer – for example in the case of a gratuitous transfer to a spouse, children or a foundation in connection with the move. Here the disposal fiction of Section 43(1) sentence 4 EStG in principle applies, unless the transaction is expressly notified to the paying agent as a gratuitous transfer, together with the required data (Section 43(1) sentence 5 EStG). Anyone who plans transfers for succession purposes in the course of the move should therefore have these questions clarified separately and in good time with the bank and for tax purposes – all the more so because, in the case of such a change of creditor, gift or inheritance tax consequences and, where applicable, foreign law at the beneficiaries’ new place of residence must also be taken into account.
The 30 Percent Trap: When Acquisition Data Get Lost
Even if the transfer itself is tax-neutral, practical pitfalls threaten in terms of documentation. Between domestic banks, the acquisition data required for later taxation – purchase date, acquisition cost, corporate actions such as splits or mergers – have been transferred automatically since 2009 (Section 43a(2) sentence 3 EStG). In the case of a transfer to a foreign institution, this automatic transmission obligation does not exist in the same way, because foreign institutions are not bound by the German reporting procedure.
This becomes particularly relevant when securities are later transferred back to a German account – for instance after a return to Germany or another change of custodian bank. If the acquisition data cannot then be proven, the so-called substitute tax base under Section 43a(2) sentence 7 EStG applies: the German bank must then assess a later sale at a flat 30 percent of the sale proceeds as the capital gains tax base – regardless of whether a gain of that amount actually arose. In the case of a transfer back from an institution within the EU, the EEA or Switzerland, this flat rate can be avoided if a certificate from the foreign bank on the original acquisition data is submitted; in the case of a transfer from a third country, the German bank is regularly barred by law from adopting the acquisition data, even if the taxpayer has their own records – a correction is then possible only after the fact, through one’s own tax return.
Anyone who transfers their securities account abroad should therefore, irrespective of the current legal position at the destination, secure all purchase statements, account statements and evidence of corporate actions in full before the domestic account is closed. After termination, online access to historical account statements is no longer permanently available at many banks.
Apply for the Loss Certificate in Good Time
A further point that is often overlooked in practice concerns the loss offsetting pools maintained at the German bank. They do not automatically move with the account when the custodian changes. Anyone who wants to continue using the losses recorded there for tax purposes – for example by offsetting them in their own income tax assessment – must apply to the previous bank for a loss certificate in good time. The application must in principle reach the bank by 15 December of the year in question; this deadline cannot be extended. If it is missed, the losses are instead automatically carried forward into the following year of the respective loss offsetting pool at the previous bank, which, where the account is closed completely, can in effect mean losing the possibility of offsetting.
The New Exit Tax on Investment Fund Units Since 2025
Until now, German tax law recognised an exit tax in the narrower sense mainly for substantial shareholdings in corporations: anyone who held at least 1 percent of a GmbH or AG and moved abroad had to pay tax under Section 6 AStG (German Foreign Tax Act) on a fictitious sale of those shares at fair market value, although no actual sale took place. Ordinary share or fund portfolios below this threshold regularly remained unaffected. The Annual Tax Act 2024 has changed this fundamentally.
Legal Basis: Section 19(3) and Section 49(5) InvStG
With the Annual Tax Act 2024, a stand-alone exit tax provision for investment units was introduced in Section 19(3) InvStG (German Investment Tax Act) (for public funds and ETFs) and in Section 49(5) InvStG (for special investment funds), transferring the system of Section 6 AStG to investment tax law almost word for word. The rule applies for the first time where the investor’s unlimited tax liability ends after 31 December 2024 – that is, to moves from 1 January 2025 onwards.
When an Investment Unit Counts as “Substantial”
Only investment units held as private assets and regarded as “substantial” are caught. This is the case if one of the following conditions is met:
- The investor holds, directly or indirectly, at least 1 percent of the issued units of a single investment fund – whereby not only the holding at the date of the move counts, but any holding of at least 1 percent reached within the last five years may be decisive; or
- the acquisition cost in that single fund amounts to at least EUR 500,000.
Both thresholds are tested per fund and not across the entire portfolio; several fund holdings are not aggregated. Anyone who spreads their assets broadly across several funds therefore, purely arithmetically, reduces the risk of reaching the EUR 500,000 threshold in any single fund. For units in special investment funds, by contrast, the law provides no de minimis threshold – a “substantial” case is always assumed here.
Since the new rule is expressly modelled closely on Section 6 AStG, it is also plausible that – like its model in Section 6(2) AStG – it applies only if the investor was subject to unlimited German income tax for a total of at least seven years within the last twelve years before the move. Anyone who does not meet this prior period would presumably not be affected by the new fund exit tax in the first place. Given the novelty of the rule, this question must be examined carefully in each individual case.
How the Tax Is Calculated
If a substantial investment unit exists, the law assumes a fictitious disposal at market value upon departure. The difference between the value of the units at the time of the move and the original acquisition cost is taxed – irrespective of whether a sale actually takes place and without the investor receiving any liquid funds. As with Section 6 AStG, a gratuitous transfer to a person who is not subject to unlimited tax liability can trigger the same effect as a move.
For a move within the EU or the EEA, the rule provides relief – following Section 6 AStG: immediate payment of the entire tax can under certain circumstances be avoided, for example by spreading the payment over several annual instalments, if necessary against security. In the case of a move to a third country, by contrast, the tax generally falls due immediately upon departure, without a comparable deferral option being automatically available. Anyone planning a move and holding larger positions in individual funds should build this liquidity question into their planning early – the tax can fall due before any sale proceeds are available at all.
Example (entirely fictitious, purely for illustration, with no connection to any real client matter): An investor has invested continuously over ten years in a single accumulating equity fund and has acquired units with an acquisition cost of EUR 520,000. When she moves to a third country, the current market value of these units is EUR 640,000. Because the acquisition cost exceeds the EUR 500,000 threshold, a substantial investment unit exists – regardless of how small her percentage holding in the total fund volume actually is. The fictitious gain of EUR 120,000 is therefore in principle taxable in the year of the move, although no unit has actually been sold and the move is to a third country in which no automatic instalment payment is provided for.
The parallels with the classic exit tax on GmbH shares are no coincidence – background, system and many structuring questions are comparable; further detail, including on valuation, deferral and return issues, is covered in our article Exit tax on GmbH shareholdings.
The Ongoing Taxation of the Remaining German Securities Account at a Glance
If the account is not transferred but continued at a German bank – or if the exit tax affects only some of the positions held – the ongoing income remains to be watched. In brief: dividends of German stock corporations regularly remain domestic-source income under Section 49(1) no. 5 EStG, for which the bank withholds, without a separate application, the full capital gains tax rate of 25 percent plus solidarity surcharge; a reduction to the rate permitted under a double taxation treaty must be applied for actively through an exemption or refund procedure with the Federal Central Tax Office (Bundeszentralamt für Steuern). Interest on ordinary bank deposits and – since the 2018 investment tax reform – distributions of German investment funds, by contrast, are as a rule no longer subject to limited tax liability. The details, in particular on the exemption and refund procedure under Section 50c EStG and the respective deadlines, are set out at length in the sister article linked above.
When More Than the Securities Account Is Affected: Extended Limited Tax Liability Under Section 2 AStG
Anyone who continues to have substantial economic interests in Germany after the move should also keep the extended limited tax liability under Section 2 AStG in view. Under certain conditions it can also capture investment income lying outside the exhaustive catalogue of Section 49 EStG – such as ordinary bank interest or gains on the sale of shares below the 1 percent threshold. The provision essentially requires that the person concerned be a German national, was subject to unlimited German income tax for a total of at least five years within the last ten years before the end of unlimited tax liability, is resident in a low-tax jurisdiction or in no foreign tax jurisdiction at all, continues to have substantial economic interests in Germany and exceeds a certain income threshold. It can apply for up to ten years after the year of the move and is examined separately for each year.
That this provision is by no means of merely theoretical significance is shown by a recent judgment of the BFH (Federal Fiscal Court) of 14 January 2025 (case no. IX R 37/21): the BFH confirmed that the British “remittance basis” taxation – a preferential regime for persons not domiciled in the United Kingdom under which foreign income not remitted to the United Kingdom remains untaxed there – is to be classified as a relevant preferential taxation within the meaning of Section 2 AStG. In the case decided, interest and dividend income from a German bank was thereby drawn into extended German tax liability, among other things. Whether the conditions of Section 2 AStG are met in an individual case is a separate examination which, where there is a corresponding foreign connection – in particular on a move to certain countries with special tax regimes – should be carried out in addition to the questions of the securities account and source tax.
Reporting Obligations: What Banks and Tax Authorities Learn About the Account
Irrespective of whether the account stays in Germany or is transferred abroad, it remains visible to the tax authorities. Under the Common Reporting Standard (CRS), German credit institutions establish the tax residence of their account holders and automatically report holdings and certain income data to the Federal Central Tax Office, which forwards them to the tax authority of the new state of residence – and conversely, Germany receives information on accounts held abroad by the same route. Our article CRS reporting obligations: what the tax office learns about foreign accounts explains which data are reported in concrete terms and what this means for emigrants.
In addition, Section 90(2) AO (German Fiscal Code) tightens the general duties to cooperate in tax matters in cases with a foreign connection: anyone who declares cross-border investment income must obtain the necessary evidence themselves and make provision in good time. An annual tax certificate and the current account balance are therefore often not sufficient in a cross-border change of custodian – anyone who has to reconstruct acquisition data, holding percentages and transfer dates only after the fact risks a tax result that is actually favourable failing solely for lack of proof.
Checklist: Preparing Your Securities Account and Your Move Properly
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| Step | Content | Typical timing |
|---|---|---|
| 1. Contact the bank early | Clarify in writing whether the account will be continued at the planned place of residence | 6–12 months before the move |
| 2. Check holding percentages | For each individual position and each fund: is there a substantial holding (≥ 1 %) or an acquisition cost of ≥ EUR 500,000? | Before the move |
| 3. Clarify the prior period | Was there unlimited tax liability in Germany for at least 7 years within the last 12 years? | Before the move |
| 4. Liquidity planning for the exit tax | For substantial investment units and substantial shareholdings: examine deferral options (EU/EEA) versus immediate payment (third country) | Before the move |
| 5. Secure purchase statements and acquisition data | Complete documentation of all positions before the account is closed or transferred | Before closing the account |
| 6. Apply for the loss certificate | Application to the previous bank by 15 December, not extendable | In the year of the change of custodian |
| 7. Examine any change of creditor separately | For a planned gift or transfer in connection with the move: do not forget to notify the bank of the gratuitous nature | Before the transfer |
| 8. Prove your status to the bank | Present the deregistration certificate or proof of residence so that the capital gains tax withholding is adjusted correctly | After the move |
| 9. Examine Section 2 AStG | Where substantial economic interests in Germany continue and the move is to a low-tax jurisdiction: clarify extended limited tax liability separately | Ongoing, up to 10 years after the move |
| 10. Apply for treaty relief | Exemption or refund application to the Federal Central Tax Office for excessive capital gains tax on dividends | Before or after the first distribution |
Conclusion
A securities account cannot be reduced to a single question when leaving Germany. Whether the bank continues the business relationship is a matter of the respective terms and conditions and of the destination country. The account transfer itself is tax-neutral where the owner remains the same, but requires careful safeguarding of the acquisition data in order to avoid later flat-rate taxation. And since the Annual Tax Act 2024, even a pure fund or ETF portfolio can, above certain thresholds, trigger a stand-alone exit tax modelled on Section 6 AStG, which falls due immediately on a move to a third country. Anyone who clarifies these points only after the move regularly has the weaker hand – especially as regards documentation.
The Fiala law firm has advised on international tax law for many years and accompanies clients in the tax preparation of a move abroad, including the account-related questions around termination, transfer and the new fund exit tax. Contact the firm without obligation to have your securities account reviewed for tax purposes in good time before the planned move.
