Sparerpauschbetrag

The Sparerpauschbetrag is Germany's annual tax-free allowance for capital income. The first €1,000 of investment income per person (€2,000 for jointly assessed couples) is completely exempt from Abgeltungsteuer and surcharges.

How it works for prediction market traders

If your total investment income — including prediction market gains, interest, dividends, and other capital income — stays below €1,000 in a tax year, you owe no Abgeltungsteuer on those gains. Only amounts above the threshold are taxed.

Freistellungsauftrag

To benefit from the Sparerpauschbetrag automatically, you can file a Freistellungsauftrag (exemption order) with your German bank or broker. However, since most prediction market platforms are not German-based, you'll typically claim the allowance when filing your annual tax return via Anlage KAP.

Example

You earned €3,500 from prediction markets and €200 in bank interest in 2024. Your total capital income is €3,700. The Sparerpauschbetrag exempts the first €1,000, so you pay Abgeltungsteuer on €2,700.

How it compares internationally

Many countries offer similar tax-free allowances for investment income. The Netherlands has the heffingvrij vermogen (€57,000 asset threshold), Ireland has a €1,270 CGT annual exemption, and the UK has a £3,000 capital gains exemption. Germany's Sparerpauschbetrag is relatively modest at €1,000 but applies to all capital income types uniformly.

Frequently asked questions

Does the Sparerpauschbetrag apply to prediction market gains specifically?

If prediction market gains are classified as Einkünfte aus Kapitalvermögen (capital income), yes — the Sparerpauschbetrag applies. However, if they're classified differently (e.g., as sonstige Einkünfte), the allowance may not be available.

Can I split the Sparerpauschbetrag across multiple platforms?

The total allowance is €1,000 per person across all sources. You cannot claim €1,000 per platform. When filing via Anlage KAP, all capital income is aggregated before the Sparerpauschbetrag is applied.