Income from capital investments

• Mainly interest income and dividend income are classified as "income from capital investments". Since January 1st 2009 also gains from selling securities (for example shares) are regarded as income from capital investments.
• In practise, the allocation of the right of taxation for this income to different countries is often involved with problems.
• If a Double Taxation Agreement between Germany and the concerning country is existent, in general that country has the right of taxation in which the remittee is resident. However, dependent on the Double Taxation Agreement, the country from where e.g. the dividend income originates can withhold source tax.
• If you maintain a residence in Germany as well as a residence out of Germany, you are deemed to be resident of that country in which you have stronger personal and economic relations in terms of the corresponding Double Taxation Agreement. This has to be checked for every single case.