Exit Tax on Private Assets: What applies to ETFs, funds, and stocks from 2026?

Are you planning to leave Germany and managing substantial private assets? The rules on exit taxation changed as of January 1, 2025. What previously applied only to shares in corporations now also extends to investment funds, ETFs, and other securities. Without proactive planning, you may face surprisingly high additional tax payments.

Previous legal situation: Why ETFs were previously excluded

Until December 31, 2024, the matter was relatively simple: Section 6 (3) AStG stated that upon emigration, only shares in corporations of at least 1 percent were taxed via a deemed disposal. In practice: Anyone holding an interest in a GmbH, AG, or another corporation had to expect that the German tax office would treat the share as fictitiously sold on the date of departure and levy tax on the gains.

ETF shares, traditional investment funds, individual stock positions below 1 percent, and other private-asset securities were not covered. An emigrant with EUR 500,000 in ETFs could leave Germany without expecting exit tax. The legislator has now closed this structuring opportunity.

The new regulation since 01/01/2025

The Annual Tax Act 2024 introduced a new category into the Foreign Tax Act: exit taxation on investment units. These rules are anchored in Section 19 (3) InvStG and Section 49 (5) InvStG and apply to all cases in which unlimited tax liability in Germany ends on or after January 1, 2025.

Which investments are affected

The new rule covers in particular:

• Units in investment funds (open-end and closed-end funds, UCITS and non-UCITS)

• Units in special investment funds (with their own stricter rules)

• ETFs structured as investment funds

• Other assets with fund characteristics under the framework of investment law

Important: Individual stocks (below 1 percent in companies) are still not covered. The legislator specifically intended to target fund structures in which German GmbH shares were packaged into fund vehicles to circumvent the old rule.

Thresholds: When does exit taxation apply?

The new rule does not apply to every tiny fund unit, but only when certain thresholds are exceeded.

Investment funds: The 1% rule or the EUR 500,000 threshold

For traditional investment funds, the following applies: taxation is triggered if you hold at least 1 percent of the issued investment units or if the acquisition costs of the unit are at least EUR 500,000.

Example: You hold a UCITS equity fund with acquisition costs of EUR 600,000. Even if your share is only 0.5 percent of the fund, you must expect exit taxation because the EUR 500,000 threshold is exceeded.

Each fund is considered separately. You may not aggregate all funds. If you have two funds of EUR 400,000 each, the rule does not apply, even if the total investment amounts to EUR 800,000.

Special investment funds: Special case without threshold

Special investment funds (also: Spezialfonds) are subject to a different, stricter rule: there is no threshold. As soon as you hold units in special investment funds and leave Germany, exit taxation applies, regardless of amount and percentage.

The reason lies in the complexity of these instruments. Special funds are often associated with high assets and offer targeted structuring potential. The legislator wanted to ensure that no tax gaps arise here either.

Calculation of exit tax on private assets

Taxation follows a simple concept: the German tax office performs a deemed disposal. You are taxed as if you had sold the fund unit on the day of your departure at current fair market value.

The trigger for taxation is the time when Germany’s taxing right over you ends, typically the day on which unlimited tax liability in Germany is terminated.

Calculation example: ETF portfolio upon departure

Scenario: You have a world ETF with the following data:

• Acquisition costs: EUR 600,000 (exceeds the EUR 500,000 threshold)

• Fair market value on the departure date: EUR 900,000

• Deemed disposal gain: EUR 300,000

Taxation is carried out using withholding tax on investment income (Abgeltungsteuer) of 25 percent on the gain, plus solidarity surcharge (5.5% of the tax) and, where applicable, church tax.

Calculation:

• Withholding tax: EUR 300,000 × 25% = EUR 75,000

• Solidarity surcharge: EUR 75,000 × 5.5% = EUR 4,125

• Church tax (if applicable, e.g. 8%): EUR 75,000 × 8% = EUR 6,000

Total burden: approx. EUR 85,000–86,000 (without church tax approx. EUR 79,000)

Recommended actions before departure

If you have an emigration plan, I recommend the following approach:

• Prepare an inventory: Document all investment units, funds, and ETFs with acquisition costs and current value. Calculate which units exceed the thresholds.

• DTA analysis: Review which double taxation agreement applies with your destination country and how it governs your situation. This should be done with a local tax advisor.

• Review alternative structuring: In some cases, lawful restructurings are still possible before departure (e.g. settlements, liquidations). However, these are individual and require expert advice.

• Coordinate deregistration: The effective deregistration date is crucial. Ensure that all relevant periods and deadlines are clearly documented.

Frequently asked questions (FAQ)

1. Does the rule also affect me if I am a citizen of another EU country?

Yes. Exit taxation is independent of your nationality. The only decisive factor is that you were subject to unlimited tax liability in Germany and that this obligation ends due to emigration. EU citizens can also be affected.

2. Can I simply sell the funds before leaving Germany?

Technically yes, but this usually creates new problems: the sale itself is a disposal and is taxed in Germany. If the fund has gains, you already pay withholding tax. This is often more expensive than a deferral solution. Better: have a tax advisor calculate which option is more profitable.

3. What role do accumulating funds play?

Accumulating funds do not distribute profits but reinvest them. As a result, fair market value rises each year. Upon departure, the entire gain (from acquisition to departure date) is taxed at once. This can lead to high one-time burdens and is an important point in asset planning.

4. What about bond funds or open-ended real estate funds?

These are subject to the same regulation. Bond funds are subject to the 1%-or-EUR-500,000 threshold, and real estate funds as well. A single large real estate fund holding can therefore also trigger exit taxation.

5. Does the rule apply retroactively to departures in 2024?

No. The regulation applies from January 1, 2025. Cases in which unlimited tax liability ended before this date are not affected.

Exit taxation and proactive planning

Exit taxation on investment units has been a reality since 2025 and will be relevant for many emigrants. ETFs, funds, and other private-asset securities are now subject to taxation if thresholds are exceeded.

However, the law offers deferral options. With a 7-year installment payment, the burden is manageable for most people. The prerequisite is that you act in time and apply for deferral.

Create an inventory of your assets today, consult a tax advisor, and clarify the DTA situation for your destination country. This helps you avoid costly surprises later.