How to Submit a Freistellungsauftrag on N26, Trade Republic & DKB (2026 Tax-Free Expat Guide)

If you hold a checking account, Tagesgeld savings account, or investment depot in Germany, any interest earnings, stock dividends, or capital gains are subject to a flat 25% withholding tax (Abgeltungsteuer) plus a 5.5% solidarity surcharge, bringing the total effective tax rate to 26.375% (plus church tax if applicable).

However, German tax law grants every tax resident a generous tax-free allowance known as the Sparerpauschbetrag. For the 2026 tax year, single individuals can earn up to €1,000 per year in capital gains and interest tax-free (€2,000 for married couples filing jointly).

To ensure your bank or broker does not automatically deduct taxes from your payouts, you must submit a formal Freistellungsauftrag (tax exemption order). In this guide, we provide step-by-step instructions for submitting your exemption order on N26, Trade Republic, DKB, and C24 Bank.

1. What is a Freistellungsauftrag & How Does It Work?

By default, German financial institutions are legally required to withhold 26.375% on every Euro of interest or capital gain earned and transfer it directly to the Federal Tax Office (Finanzamt). A Freistellungsauftrag is an official instruction directing your bank to exempt your earnings from withholding tax up to your specified allowance limit.

• Single Taxpayers: Max €1,000 total allowance across all banks.
• Married Couples / Registered Partners: Max €2,000 total allowance (joint exemption order).
• Splitting Your Allowance: You can divide your €1,000 allowance across multiple financial institutions (e.g. €400 to N26 for savings interest, €600 to Trade Republic for stock dividends). The total sum across all institutions must not exceed €1,000.

2. Prerequisites: Who Qualifies?

To submit a valid tax exemption order in Germany, you must fulfill three conditions:

1. You must be a tax resident in Germany (unlimited tax liability).
2. You must possess an 11-digit German Tax ID (Steueridentifikationsnummer / Steuer-ID).
3. Your current residential address must be registered with the local Bürgeramt (Anmeldung).

3. Step-by-Step UI Instructions for Major German Banks & Brokers

A. How to Submit on N26 Bank

1. Open the N26 App on your smartphone.
2. Tap on your Profile / Account Icon in the top corner.
3. Select Taxes & Tax Reports (Steuern).
4. Tap Tax Exemption Order (Freistellungsauftrag).
5. Enter your 11-digit Steuer-ID if not already registered.
6. Enter your desired exemption amount (e.g. €1,000) and confirm with your 2FA security code.

Looking to set up a fee-free expat checking account? Open an account via the N26 Expat Checking Account Link.

B. How to Submit on Trade Republic

1. Open the Trade Republic App.
2. Go to your Profile tab (avatar icon).
3. Scroll down to the Settings section and tap Tax Data (Steuerdaten).
4. Select Exemption Order (Freistellungsauftrag).
5. Tap Create / Edit Exemption Order.
6. Input your allocation amount (up to €1,000) and save. Changes take effect immediately for upcoming interest and dividend payouts.

C. How to Submit on DKB (Deutsche Kreditbank)

1. Log into your DKB Banking Portal or DKB App.
2. Navigate to Service / Postfach > Steuern & Freistellungsauftrag.
3. Select Freistellungsauftrag online verwalten.
4. Choose single or joint filing, specify the valid calendar year (2026), and enter the target Euro amount.
5. Authenticate the update via the DKB TAN2go app.

Compare DKB accounts and features via the DKB Girokonto Account Link.

D. How to Submit on C24 Bank

1. Open the C24 Bank App.
2. Tap Profile & Settings > Taxes (Steuern).
3. Tap Freistellungsauftrag einrichten.
4. Enter your tax ID and desired threshold amount, then authorize with 2FA.

Set up a smart tier checking account using the C24 Bank Smart Account Link.

4. What Happens If You Forget or Exceed Your Allowance?

If you forget to submit a Freistellungsauftrag, your bank will automatically withhold 26.375% tax. However, your money is not lost! You can reclaim all overpaid withholding taxes at the end of the year by filing a German income tax return (Steuererklärung) and completing Anlage KAP (Income from Capital Assets).

Conversely, if you accidentally allocate more than €1,000 total across multiple banks, the Federal Central Tax Office (BZSt) will detect the overlap via your Steuer-ID and issue a correction letter ordering back-taxes.