Germany · Tax regime
Exit taxation (Wegzugsbesteuerung, §6 AStG)
This rule was substantially widened from 1 January 2025. The Annual Tax Act 2025 extended exit taxation to units in investment funds and special investment funds, through new provisions in §19 and §49 InvStG. These mirror the §6 AStG rules that previously applied only to corporate shareholdings.
The 2025 extension to investment funds is the change almost nobody has priced in. Historically, the exit tax was a founder's problem. You needed to hold 1% of an operating company to be caught by it. From 2025, a purely passive investor holding EUR 500,000 or more of acquisition cost in a single fund or ETF is caught on the same deemed-disposal basis. A large, conventionally diversified portfolio can now trigger German exit tax on departure, with no operating business anywhere in sight.
The facts
- Total landed cost
- This is a deemed disposal of unrealised gains on departure. You are taxed as if you sold the day before you emigrated. On a EUR 20m unrealised gain in a qualifying shareholding, that is a seven-figure charge on money you never actually received.
- Route type
- Tax regime, not a visa
- Physical presence
- This applies where the individual has been subject to unlimited German tax liability for at least 7 of the previous 12 years.
- Family
- This applies to the individual. But note that gifts and inheritances to non-resident family members are themselves trigger events
- Permanent residency
- Not applicable
- Citizenship
- Not applicable
- Dual citizenship
- Permitted
- Requirements
- Unlimited German tax liability for at least 7 of the previous 12 years.A shareholding of 1% or more in a corporation (§17 EStG), or, since 2025, investment fund units where the holding is at least 1% of the fund or the acquisition cost is at least EUR 500,000.An exit event: emigration, a gift or inheritance to a non-resident, or the loss of German taxing rights.
- Since 1 January 2025, fund units fall within scope if the taxpayer held at least 1% of the fund's units at any point in the last five years, or if acquisition costs of those units reach EUR 500,000. That EUR 500,000 acquisition-cost test is the trap. It catches ordinary ETF investors, not just insiders.
- The classic trigger under §6 AStG is a shareholding of 1% or more in a corporation under §17 EStG, held by someone subject to unlimited German tax liability for at least 7 of the last 12 years. That 7-of-12 test is short. A family arriving in Germany can cross it during a single school cycle.
- The charge falls on unrealised gains. There is no cash on hand to pay it, and that is exactly why it discourages people from leaving.
- Interest-free, indefinite deferral for moves within the EU or EEA was abolished for exits from 2022 onward. Under the current regime, the tax can be paid in instalments over seven years, generally against security. Whether grandfathering applies to exits before 2022 is a question for a specialist.
- Gifts and inheritances to relatives living abroad count as exit events in their own right. Succession planning that moves shares to a child living overseas can trigger the tax, even if no one actually moves.
- Returning within the statutory window can cancel the charge, but relying on that means committing in advance to come back. That is a poor foundation for a relocation plan.
- Germany offers no offsetting tax regime. There is no non-dom status, no expat ruling, no forfait. You pay the full 47.475%, and the exit tax applies on the way out.