As in most countries, in Germany you could use capital losses (Verlustverrechnung) to reduce your gains and pay less tax. However, German law is extremely strict about which losses can offset which gains.
The separate 'buckets' (Verlusttöpfe):
- Share-loss bucket (Aktienverlusttopf): Losses generated from selling individual shares can ONLY be offset against gains from selling other individual shares. You would not be able to use share losses to reduce dividends, interest, or ETF gains.
- General bucket (Allgemeiner Verlusttopf): Losses from selling ETFs, investment funds, or bonds can be offset against any type of capital gain (including dividends or interest).
💡 Example
You sell Tesla shares at a loss of 2.000 €. In the same year you receive 3.000 € in dividends and make 1.000 € selling an ETF. You would not be able to use the Tesla loss to reduce those taxes. The loss would be carried forward (Verlustvortrag) to future years, waiting until you sell OTHER shares at a gain.
⚠️ Important
German brokers manage these Verlusttöpfe automatically. If you use a foreign broker, you would need to track each bucket carefully yourself when filling in your return (Anlage KAP).