Kirchensteuer

Kirchensteuer is a tax levied by German states on behalf of registered religious communities (primarily Catholic and Protestant churches). It applies as a surcharge on your income tax — including the Abgeltungsteuer on investment income.

Rates

• 8% of your income tax in Bavaria and Baden-Württemberg
• 9% of your income tax in all other German states

Impact on prediction market taxes

For church members, the effective tax rate on prediction market capital gains rises from ~26.375% (Abgeltungsteuer + Soli) to approximately 27.8–28.6%. While this seems small on a percentage basis, it adds up for active traders.

Opting out

Kirchensteuer only applies if you're a registered member of a participating religious community. Leaving the church (Kirchenaustritt) eliminates this surcharge. The process is handled through your local civil registry office (Standesamt) or district court (Amtsgericht).

Calculation example for prediction market traders

You earned €10,000 in prediction market profits (above the Sparerpauschbetrag). Here's the full breakdown for a church member in North Rhine-Westphalia (9% Kirchensteuer):

• Abgeltungsteuer (25%): €2,500
• Solidaritätszuschlag (5.5% of €2,500): €137.50
• Kirchensteuer (9% of €2,500): €225.00
• Total tax: €2,862.50 (effective rate: 28.6%)

Without Kirchensteuer, the same trader would pay €2,637.50 — a €225 difference. For high-volume traders, this surcharge can total thousands of euros annually.

Frequently asked questions

Is Kirchensteuer automatically deducted from prediction market gains?

Only if you trade through a German bank or broker that has your church membership data on file. For international platforms like Kalshi or Polymarket, you declare and pay Kirchensteuer when filing your annual tax return via Anlage KAP.