→ Back to home🏦 Banking

Freistellungsauftrag Explained: Save on German Interest Tax as a Moroccan in Germany

2025-10-11

Learn how a Freistellungsauftrag saves you money on German interest tax — what it is, how to apply, and common mistakes to avoid.

If you have a bank account, savings account, or investment portfolio in Germany, the government automatically withholds 25% tax on your interest and dividends — unless you take one simple step to stop it. That step is called a Freistellungsauftrag, and most people living in Germany either don't know about it or forget to set it up. As a Moroccan building your financial life in Germany, this one form could save you hundreds of euros every year without any complicated paperwork.

What Is a Freistellungsauftrag?

A Freistellungsauftrag (literally "exemption order") is a written instruction you give to your German bank or broker that tells them: "Don't withhold tax on my investment income — at least not up to this amount." It is a completely legal tool written into German tax law (§ 44a EStG), and every resident in Germany is entitled to use it.

Without it, your bank automatically deducts the Abgeltungsteuer (capital gains tax) of 25%, plus a 5.5% solidarity surcharge on that tax, meaning you effectively lose up to 26.375% of every euro of interest or dividend income before it ever reaches your account. You then have to claim it back through your annual tax return — a process that takes months and requires paperwork you may not be comfortable with yet.

With a Freistellungsauftrag, the bank simply does not deduct the tax in the first place, up to a specific annual limit.

The Sparerpauschbetrag: Your Tax-Free Allowance

The Freistellungsauftrag is linked to something called the Sparerpauschbetrag — the saver's lump-sum allowance. Since 2023, this allowance is:

• €1,000 per year for single individuals
• €2,000 per year for married couples filing jointly

This means the first €1,000 (or €2,000) of investment income you earn each year is completely tax-free. The Freistellungsauftrag is how you actually activate this exemption with your bank. If you don't submit it, your bank doesn't know you have this allowance — and it will tax you anyway.

Who Can Submit a Freistellungsauftrag?

Any person who is tax-resident in Germany can submit a Freistellungsauftrag. This includes:

• Ausbildung apprentices on a training contract
• Workers with a job seeker visa who have found employment
• Freelancers and self-employed people registered in Germany
• Students with a part-time job and a German bank account

You do not need to be a German citizen. You need to be registered at a German address (angemeldet) and have a German tax identification number (Steuer-ID), which you automatically receive after registering your address at the Einwohnermeldeamt.

If you are not yet tax-resident in Germany — for example, if you opened a German account remotely before arriving — you cannot yet submit this form. But it should be one of the first things you do after you register your address.

Where and How to Submit the Form

The process is simpler than most people expect. Here is a step-by-step guide:

• Online banking: Most German banks — including Deutsche Bank, Commerzbank, ING, DKB, Comdirect, and N26 — allow you to submit the Freistellungsauftrag directly through your online banking dashboard. Look for it under "Einstellungen" (settings), "Steuern" (taxes), or "Freistellungsauftrag."
• Branch visit: If your bank has physical branches (e.g., Sparkasse or Volksbank), you can fill out a paper form in person. Bring your ID and your Steuer-ID.
• Written request: Some banks accept a signed letter. Download their form from their website, fill it in, sign it, and send it by post or upload it through their secure message system.

What Information You Need

When filling in the form, you will need:

• Your full legal name and date of birth
• Your home address in Germany
• Your Steuer-ID (11-digit number sent by post from the Bundeszentralamt für Steuern after address registration)
• The amount you want to allocate to this bank (see the next section on splitting)

The form takes about five minutes to complete. Once submitted, it stays valid until you change or cancel it — you don't need to resubmit every year.

Splitting Your Freistellungsauftrag Across Multiple Banks

Here is something many people miss: if you have accounts at more than one bank or broker, you can split your €1,000 allowance across them. You just need to make sure the total across all your Freistellungsaufträge never exceeds €1,000 (or €2,000 for couples).

Example: Suppose you have:

• A current account with interest at ING → allocate €200
• A savings account at DKB → allocate €500
• An investment account at Trade Republic → allocate €300
• Total: €1,000 ✓

Each bank only exempts income up to the amount you assigned to them. If your interest at ING turns out to be €350 — more than your €200 allocation — they will tax the extra €150. You can adjust your allocations during the year to match your expected income better.

The German tax authority (Finanzamt) receives data from all banks, so they can verify that no one exceeds the total limit.

What Happens to Income Above the Allowance?

If your investment income exceeds €1,000 in a year, the bank will automatically withhold tax on the amount above your exemption. You have two options:

1. Accept it: The tax is deducted at source and you owe nothing more. The bank reports it to the Finanzamt.
2. Claim it back via your tax return (Steuererklärung): If your overall income is low enough that your marginal tax rate is below 25%, you can file a tax return and potentially get some money back. This is common for Ausbildung apprentices, whose annual gross income is often below €12,000–€15,000.

For example, if you earned €1,400 in interest and your Freistellungsauftrag covers €1,000, the bank withholds 26.375% on the remaining €400 = approximately €105.50 in tax. You can claim this back if your income tax rate is lower than 25%.

Common Pitfalls: What People Get Wrong

This is where many newcomers lose money unnecessarily.

• Forgetting to submit the form at all. This is the most common mistake. You open your bank account, get everything set up, and never think about the Freistellungsauftrag. The bank taxes you from day one.
• Not knowing your Steuer-ID. Without it, the bank cannot process your request. Check your post carefully after registering — the letter from Bundeszentralamt für Steuern arrives within 2–4 weeks. You can also request it again at www.bzst.de.
• Exceeding the €1,000 limit across banks. If you accidentally assign €700 to ING and €700 to DKB, the total is €1,400 — €400 over the limit. The Finanzamt will notice and issue a tax demand. Always double-check your allocations.
• Not updating after life changes. If you get married, your joint allowance doubles to €2,000 — but you need to update your forms. Similarly, if you close an account, cancel that bank's Freistellungsauftrag so you can reassign the amount elsewhere.
• Thinking it applies to salary. The Freistellungsauftrag only covers Kapitalerträge (investment income): interest, dividends, and capital gains on shares or ETFs. It does not affect income tax on your wages, which is handled separately through your tax class (Steuerklasse).
• Not submitting for a brokerage account. Many people remember to do it for their savings account but forget their broker (e.g., Trade Republic, Scalable Capital, Comdirect). These platforms also pay dividends and realize capital gains, and they will tax you without an exemption order.

A Quick Example: Real Numbers

Let's say you are a Moroccan apprentice (Aziz, 26 years old, living in Cologne) doing a three-year Ausbildung as an IT specialist. You earn €900/month gross. You open:

• A DKB savings account earning 3.5% per year on €10,000 → €350 in annual interest
• A Trade Republic account holding ETFs that pay €300 in dividends
• A N26 account with a small interest rate producing €80

Total investment income: €730

If Aziz submits Freistellungsaufträge — €350 to DKB, €300 to Trade Republic, €80 to N26 — he pays zero capital gains tax on all of it. Without the forms, he would lose approximately €192 to withholding tax (26.375% × €730). That's money he could spend on a flight home to Morocco.

Conclusion

The Freistellungsauftrag is one of the easiest, highest-impact financial steps you can take as a newcomer in Germany. It takes five minutes, costs nothing, and can save you hundreds of euros annually. Submit it to every bank and broker where you hold an account, make sure the total does not exceed €1,000 (or €2,000 as a couple), and update it whenever your financial situation changes.

If you are still planning your move to Germany or working through your Ausbildung application, there are many more practical steps like this one that can make a real difference. Book a consultation with our German immigration specialist (€16) to plan your move — and make sure you start your financial life in Germany on the right foot from day one.