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Notifying non-withholding of German capital gains tax

Withholding presupposes that there is something to withhold from. Where investment income consists wholly or partly of something OTHER THAN MONEY (§ 8(2) EStG) and the cash part does not cover the capital gains tax, the PAYEE must MAKE THE SHORTFALL AVAILABLE to the party obliged to withhold (§ 44(1) sentence 7 EStG). Where the payee fails to do so, that party must NOTIFY its own ESTABLISHMENT TAX OFFICE in accordance with § 93c AO (sentence 10). The notification does not replace the withholding — it records that the withholding failed, and shifts the matter back to the payee, who is the taxpayer in any event (sentence 1).

Up to date for 2026 — verified on September 23, 2026Official procedure, no printed formGuide: about 25 min

Deadlines

The tax arises when the income ACCRUES to the payee
§ 44(1) sentence 2 EStG — and the withholding is to be made at that moment (sentence 3)
The payee's objection to collection from the overdraft: BEFORE the income accrues
§ 44(1) sentence 9 EStG — afterwards it is too late
Notification: in accordance with § 93c AO
That is, by the last day of February of the following year (§ 93c(1) no. 1 AO)

Documents to prepare

  • ELSTER access with a certificate or an ELSTER business account
  • The resolution on the distribution in kind, or evidence of the benefit in kind
  • The date the investment income was credited
  • A description of the income concerned
  • For securities: description, international securities identification number and quantity
  • The amount for which the withholding failed, where ascertainable
  • Evidence that the payee was asked to provide the shortfall
  • The payee's name, address and tax identification number
See the procedure on the official site

No form is attached to this procedure: the link leads to the official page that describes it.

What this page gives you

The guide above and the link to the official site. ActioFin does not produce any document for this page: whatever you fill in or file is done on the official medium.

Who this applies to

  • Any company making a DISTRIBUTION IN KIND or conferring a benefit in kind treated as investment income — there is by definition no cash to withhold from (§ 44(1) sentence 7 EStG)
  • Any party obliged to withhold whose payee does not make the shortfall available (§ 44(1) sentence 10 EStG)
  • The PAYEE themselves bears the duty to provide the shortfall (sentence 7) — they are also the taxpayer for the capital gains tax (sentence 1)
  • Paying agents holding an account of the payee: they may collect the shortfall from that account WITHOUT CONSENT (§ 44(1) sentence 8 EStG)
  • And they may, so far as the payee has not objected BEFORE the income accrues, use an undrawn overdraft facility for it (§ 44(1) sentence 9 EStG)
  • Not concerned: anyone who was able to withhold — the ordinary capital gains tax return procedure then applies

Worked example

A GmbH transfers a company car to its shareholder in 2026 instead of a cash dividend

The shareholders resolve on a distribution in kind: the shareholder receives a vehicle, not money. Capital gains tax nonetheless arises, at the moment the income accrues (§ 44(1) sentence 2 EStG); at that moment the GmbH, as the party owing the income, must make the withholding for the payee's account (sentence 3). Only there is no cash sum to withhold from. For exactly that case § 44(1) sentence 7 EStG provides that the PAYEE — here the shareholder — must make the shortfall available to the GmbH, where the income consists wholly or partly of something other than money and the cash part does not cover the tax. How large that shortfall is, the flat-rate investment tax calculator works out; this page states no rate. If the shareholder transfers the money, the GmbH remits the tax and the matter is closed. If he refuses, sentence 10 bites: the GmbH must notify ITS OWN establishment tax office in accordance with § 93c AO, transmitting the date the investment income was credited, the description of the income concerned, and — where ascertainable — the amount of income for which the withholding FAILED. The deadline follows from § 93c(1) no. 1 AO: the last day of February of the following year. The GmbH has then done what is required of it; the taxpayer for the capital gains tax remains the payee in any event (§ 44(1) sentence 1 EStG).

How to fill it in, step by step

  1. Establish whether the investment income consists wholly or partly of something OTHER THAN MONEY (§ 8(2) EStG) and whether the cash part covers the capital gains tax (§ 44(1) sentence 7 EStG).
  2. Fix the moment of accrual: that is when the tax arises and when the withholding is to be made (§ 44(1) sentences 2 and 3 EStG).
  3. Compute the shortfall — the rate and base are carried by the flat-rate investment tax calculator.
  4. Ask the payee to make the shortfall available; that is their statutory duty (§ 44(1) sentence 7 EStG).
  5. Check whether you hold an account of the payee: you may then collect the shortfall without their consent (§ 44(1) sentence 8 EStG).
  6. Check further whether an agreed overdraft facility is undrawn and the payee has not objected before accrual (§ 44(1) sentence 9 EStG).
  7. If the payee does not comply, log in to Mein ELSTER and select the notification of non-withholding of capital gains tax.
  8. Transmit the notification to YOUR establishment tax office, in accordance with § 93c AO (§ 44(1) sentence 10 EStG).
  9. Include the three particulars the statute names: the date the income was credited, the description of the income or the class of securities with its identification number and quantity, and — where ascertainable — the amount for which the withholding failed.

Good to know

  • The taxpayer for capital gains tax is the PAYEE (§ 44(1) sentence 1 EStG); the withholding is made for their account. The notification therefore returns the matter to where the tax debt already sits.
  • The right to collect the shortfall WITHOUT CONSENT from an account of the payee (§ 44(1) sentence 8 EStG) is one of the few places where tax law permits access without agreement.
  • Access to the overdraft is subject to a condition the payee controls: it works only so far as they have not objected BEFORE the income accrues (§ 44(1) sentence 9 EStG).
  • The notification goes to the establishment tax office of the party OBLIGED TO WITHHOLD, not to the payee's tax office (§ 44(1) sentence 10 EStG).
  • It runs on the § 93c AO track — the same rails as the wage tax certificate, with the same deadline of the last day of February of the following year (§ 93c(1) no. 1 AO).
  • The third particular carries a proviso: the amount of income is to be transmitted WHERE ASCERTAINABLE (§ 44(1) sentence 10 no. 3 EStG). The legislator therefore expects that it sometimes is not.
  • Capital gains tax falling due at the same moment is ROUNDED DOWN to the next whole euro (§ 44(1) sentence 6 EStG).
  • The § 93c AO data record states whether the notification is an initial, corrected or cancelling one (§ 93c(1) no. 2 AO) — correction is therefore provided for.

Common mistakes

  • Assuming no capital gains tax arises without a cash flow. It arises when the investment income accrues (§ 44(1) sentence 2 EStG), whatever its form.
  • Advancing the shortfall out of your own funds without demanding it. Making it available is the PAYEE's duty (§ 44(1) sentence 7 EStG).
  • Addressing the notification to the payee's tax office. The recipient is the establishment tax office of the party obliged to withhold (§ 44(1) sentence 10 EStG).
  • Notifying nothing because nothing was withheld. That is precisely the case that triggers the duty.
  • Treating the notification as a substitute for withholding. It records the failure; the taxpayer remains the payee (§ 44(1) sentence 1 EStG).
  • Drawing on the overdraft although the payee objected in time. Access applies only so far as they have not objected BEFORE accrual (§ 44(1) sentence 9 EStG).
  • Omitting the amount although it is ascertainable. It must then be transmitted (§ 44(1) sentence 10 no. 3 EStG).
  • Overlooking the February deadline: the notification follows § 93c AO, where the transmission period ends on the last day of February of the following year (§ 93c(1) no. 1 AO).

Frequently asked questions

When does a duty to notify arise at all?

Where the payee fails to comply with their duty to make the shortfall available to the party obliged to withhold; that party must then notify its own establishment tax office in accordance with § 93c AO (§ 44(1) sentence 10 EStG).

Why must the payee put up money?

Because they are the taxpayer for the capital gains tax (§ 44(1) sentence 1 EStG) and because § 44(1) sentence 7 EStG expressly obliges them to make the shortfall available where the income consists wholly or partly of something other than money and the cash part does not cover the tax.

May I simply collect the money from the account?

If you hold an account in the payee's name, yes: the party obliged to withhold may collect the shortfall without the payee's consent (§ 44(1) sentence 8 EStG). An undrawn overdraft facility may be used so far as the payee has not objected before accrual (sentence 9).

What must the notification contain?

Besides the particulars in § 93c(1) AO: the date the investment income was credited, the description and international securities identification number of the class of securities with the quantity where available — otherwise the description of the income concerned — and, where ascertainable, the amount of income for which the withholding failed (§ 44(1) sentence 10 EStG).

Which tax office receives it?

The establishment tax office competent for the party obliged to withhold (§ 44(1) sentence 10 EStG).

By when?

The notification is made in accordance with § 93c AO, under which the data must be transmitted after the end of the tax period by the last day of February of the following year (§ 93c(1) no. 1 AO).

Go further

Compute the related amounts

Understand this form: the related course

Related forms

Official sources

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Guide and document provided for information purposes only; they do not constitute personalised legal or tax advice. Check the recipient organisation's requirements and consult a professional if needed.