By Marc Finnern, published on 29.09.2026
What the advance lump sum is
The advance lump sum taxes an assumed minimum yield of investment funds and ETFs every year in advance. It applies not only to accumulating funds but to any fund whose actual distribution for the year falls short of that minimum yield. Without this rule, an accumulating ETF could grow tax-free for decades, because its earnings stay inside the fund and never flow out as a distribution. The legal basis is § 18 of the German Investment Tax Act (InvStG), introduced with the 2018 investment tax reform.
It is levied on the first business day of the following year, for 2026 that is 4 January 2027, because 1 January 2027 falls on a Friday but is a public holiday, and 2 and 3 January are a weekend. Trade Republic deducts the amount automatically from the settlement account, provided it holds sufficient cash.
Base rate of recent years
The base rate (Basiszins) is published every January by the German Federal Ministry of Finance and derived from the yield of public bonds. It varies noticeably from year to year.
A rising base rate means a higher advance lump sum for 2026 than in previous years, provided the funds gained in value, because the base yield grows proportionally with the base rate.
- 2023: 2.55 percent
- 2024: 2.29 percent
- 2025: 2.53 percent
- 2026: 3.20 percent
The formula, step by step
The calculation from § 18 InvStG consists of four steps that build on each other.
- Form the base yield, meaning the value of the share on 1 January times the base rate times 70 percent. For 2026, with a 3.20 percent base rate, that is 2.24 percent of the value at the start of the year.
- Subtract distributions made during the year. If the actual distribution already reaches the base yield, the advance lump sum is zero.
- Cap it at the actual increase in value during the calendar year. If the price fell or stayed unchanged, the advance lump sum remains zero regardless of the base yield.
- Apply the partial exemption, between 0 and 80 percent depending on the fund type, and charge capital gains tax plus solidarity surcharge and, where applicable, church tax on the remaining amount, to the extent the tax-free allowance is used up.
Pro-rating for a mid-year purchase and the partial exemption by fund type
Anyone who does not hold a fund share on 1 January but buys it during the year pays the advance lump sum only proportionally. The base yield is multiplied by the factor (13 minus purchase month) divided by 12. A purchase in July (purchase month 7) gives a factor of 6/12, a purchase in December (purchase month 12) only 1/12.
The partial exemption reduces the taxable amount depending on the fund type, because the fund itself has already paid corporate tax on certain earnings.
- Equity funds (at least 51 percent equity share): 30 percent
- Mixed funds (at least 25 percent equity share): 15 percent
- Real estate funds: 60 percent
- Foreign real estate funds: 80 percent
- Other funds, such as bond funds: 0 percent
Example: an equity ETF held for a full year
An equity ETF is worth 10,000 euros on 1 January 2026 and 12,500 euros on 31 December 2026, with no distribution during the year. The tax-free allowance has already been used elsewhere.
This example matches the calculator above exactly, so you can follow every intermediate step there and repeat it with your own figures.
- Base yield: 10,000 euros times 3.20 percent times 70 percent equals 224.00 euros.
- Pro-rating does not apply, because the share was held all year.
- The cap at the value increase (2,500 euros) does not apply, because the base yield of 224.00 euros is lower. The advance lump sum is 224.00 euros.
- A 30 percent partial exemption for the equity fund reduces the taxable base to 156.80 euros.
- At a 26.375 percent rate for capital gains tax plus solidarity surcharge, the resulting tax is 41.36 euros, due on 4 January 2027.
How Trade Republic deducts the amount in January
Trade Republic automatically debits the advance lump sum from the settlement account in January, not by selling shares. If the balance on the settlement account is insufficient, the booking is postponed and carried out once funds are available again.
An existing exemption order is applied to the advance lump sum first, before any capital gains tax is charged. If the tax-free allowance for the year has already been used up by interest or dividends, the advance lump sum is taxed in full.
Recognising the advance lump sum in the CSV export
In Trade Republic's CSV export, the advance lump sum appears as its own line with the ISIN of the affected fund or ETF, but without a share count or purchase price, because no purchase or sale took place. This distinguishes it from a normal tax line for a sale.
On a later actual sale of the same fund share, the advance lump sum already taxed is deducted from the tax on the real capital gain, so the same increase in value is not taxed twice. Trade Checker takes this into account when displaying realised gains.
Frequently asked questions
Do I have to transfer the advance lump sum myself?
No, as long as there is sufficient balance on the settlement account. Trade Republic deducts the amount automatically on the first business day of the following year.
Do I pay an advance lump sum if the price fell during the year?
No. The advance lump sum is capped at the actual increase in value during the calendar year. If the price fell or stayed unchanged, it is zero, regardless of the base yield.
Where can I find the base rate for a given year?
The German Federal Ministry of Finance publishes it every January in a circular. The calculator on this page already includes the base rates for 2023 to 2026.