Almost nothing from the real estate fund reached the settlement account. Nevertheless, a notification names an amount as a preliminary flat-rate distribution (Vorabpauschale). Before you enter it as additional income or as a tax already deducted, distinguish three different quantities: actual distribution, tax-assessed income and the payment resulting from your personal assessment.
This article deals with private fund shares within the German investment tax framework. A direct rental apartment, real estate bond or any project participation is not thereby equivalent. Pension and insurance constellations also require their own classification. No specific fund type or personal tax liability is confirmed here.
There can be a taxable income even without a distribution
§ 16 InvStG names distributions, preliminary flat-rate distributions and capital gains on disposals as different investment incomes. [ERTRAG] You therefore do not have to have sold shares or received the same amount in cash for the Vorabpauschale to be relevant. Conversely, the flat-rate amount is not newly available credit for the next loan instalment.
Prepare the fund identifier, number of shares, acquisition data and the concrete statement for the review. Use the redemption prices and distributions relevant for the calendar year; today’s custody value alone is not sufficient. For a savings plan, shares purchased later must not silently be treated as an unchanged year-round holding.
First check the calculation basis
§ 18 InvStG starts from the redemption price at the beginning of the year and uses 70 percent of the base interest rate published for the year. The base return determined in this way is limited by the price development up to the last redemption price of the year plus distributions. From this limited base return the distributions are deducted, insofar as a positive difference remains. [VORAB]
The base interest rate is a tax calculation figure, not a guaranteed return of your fund. For an actual settlement the value published for the relevant year must be used. The following freely chosen interest rate is expressly not a statement of the official base interest rate for 2026 or any other specific year.
Own full-year model with limited value increase
Assume the relevant shares were acquired before the beginning of the year and held unchanged throughout the model year. Their redemption value at the beginning is 20.000 euros, at the end 20.300 euros; 40 euros are distributed during the year. For this learning model the base interest rate is assumed to be 3 per cent only.
The still unlimited base calculation reads 20.000 × 3 % × 70 % = 420 euros. For the limitation the model counts 300 euros price increase plus 40 euros distribution, i.e. 340 euros. Thus 340 euros remain from the base calculation. After deducting the 40 euros distribution a Vorabpauschale of 300 euros results.
- Actually distributed – Amount: 40 euros; Meaning: cash inflow before personal tax treatment
- Vorabpauschale – Amount: 300 euros; Meaning: additional tax income assessment, not a distribution
- Tax personally payable – Amount: not calculated here; Meaning: follows only from the further relevant tax data
A second control variant illustrates the limit: If, with the other assumptions unchanged, the last redemption value were 20.600 euros, 600 + 40 = 640 euros would be the limiting amount higher than the base calculation. Then the base return would remain 420 euros and after deduction of the distribution the Vorabpauschale would be 380 euros. No market promise about future fund gains follows from this.
Capture the correct timing and the actual cash requirement
§ 18 assigns the tax inflow to the first working day of the following calendar year. In the year of acquisition the reduction for full months before the month of acquisition regulated there must also be observed. [VORAB] The calculation example deliberately does not reflect this acquisition-year question. A settlement with other acquisition data therefore need not produce the same amount.
For domestic custody § 44 EStG names the competent authority for the tax deduction. For Vorabpauschalen there are also rules on the provision of a missing cash amount and on the possible collection from an own account held there. [STEUER] A possible cash claim is therefore not contradictory solely because of a small distribution.
Our editorial recommendation: Ask the depositary which tax amount will likely be required according to its specific statement, when and from which account. Make actually available funds ready for that purpose. The rules regarding an existing credit balance and a possible utilisation of an agreed current account overdraft are not the same; the article does not recommend an overdraft. An unresolved demand will be answered based on the statement and not merely ignored because of a missing distribution.
Do not confuse the preliminary lump sum with the tax amount
Partial exemptions according to § 20 InvStG are a further tax layer. [FREI] In addition there are the personally relevant statement data. Therefore the €300 preliminary lump sum in the example does not automatically become €300 tax and nor a smaller flat amount prescribed by the article. Have it explained which amount actually remains after the tax treatment applied to you.
In the housing budget you use the actual bookings. If the €40 model distribution is entered as a gross receipt, a tax amount already withheld from it must be considered as a cash outflow. If instead you use the actual net credit, you do not deduct the same tax amount again. A further confirmed payment for the preliminary lump sum remains a separate transaction. The €300 preliminary lump sum is not additionally entered as a source of funds.
Keep the documents for a later sale as well
According to § 19 paragraph 1 InvStG preliminary lump sums accounted for during the holding period reduce the later capital gain on disposal; they are to be considered in full regardless of a possible partial exemption. [VERKAUF] This calculation step is not a later automatic cash payment of the lump sum and does not replace a complete sales statement.
Therefore retain the annual proofs together with acquisition and portfolio documents. A clarifiable result connects the appropriate annual entry, the personal tax calculation, the actually required cash amount and the retained documents. Whether you hold or dispose of the investment also requires a separate investment and liquidity decision; no recommendation for that follows from the preliminary lump sum alone.