Can share losses be offset against dividends?

No. Under the rules in force, losses from selling shares may only be offset against gains from selling shares. Dividends, interest and income from funds or certificates are also investment income, but they sit in a different offset category. This separation regularly produces the situation where you pay tax on dividends in a year that ended in an overall loss. The unoffset share loss is not lost: it carries forward into the following year's share pool. What matters is that it is declared in your tax return and thereby formally assessed. The restriction is legally contested and has been referred to the Federal Constitutional Court, with no decision so far.

What changed for losses from derivatives?

Derivatives previously had their own very narrow offset circle with an annual cap in euros. That restriction was removed outright by the Annual Tax Act 2024, retroactively and for all cases still open. Since then, derivative losses can be offset against all investment income rather than only against similar gains. The practical wrinkle is a timing gap in implementation: banks are only required to apply the new system in ongoing withholding from 1 January 2026. For earlier years your broker may still have withheld under the old rule, with the correction running through your tax return. Check your statements accordingly.

What is a loss certificate for?

For offsetting across several institutions. Your bank only knows the transactions that took place with it and only offsets within its own pools. If you made losses at one broker and gains at another, the second withholds tax while an unused loss sits at the first. A loss certificate lets you bring both sides together in your tax return. The deadline is decisive: the request has to reach the institution holding the losses by 15 December of that year. After that it is too late for the year, and the loss carries forward automatically instead. Note also that requesting the certificate resets that broker's pool to zero.

Do the same rules apply to crypto?

No. Crypto assets held privately fall outside the flat withholding regime and under private sale transactions instead. They therefore form their own offset circle, entirely separate from shares and other investment income. A loss on a crypto sale cannot be offset against a share gain or against dividends, only against gains from other private sale transactions. The rules on timing differ from the withholding regime as well. In practice the main consequence is that your broker does nothing for you here: there is no automatic offsetting and no annual tax statement in the familiar sense. Complete documentation sits with you.

What happens to losses I cannot offset?

They do not expire. They carry forward into the corresponding offset category of the following year and remain available there. A share loss moves into next year's share pool, a loss from other investment income into that separate pool. The prerequisite is that the loss is declared in your tax return at all. Without a declaration no carryforward is assessed, and you cannot draw on it in later years. This is the most common avoidable mistake in the area, because many assume the bank handles it automatically. It does so within its own pools, but the assessment that preserves the loss for the future only happens through your return.

Offsetting Trading Losses in Germany

Trading losses only reduce your German tax bill if they land in the right offset category. German law maintains several such pools, and they are walled off from each other: losses from selling shares can only be offset against gains from selling shares, while crypto follows separate rules outside the flat withholding tax entirely. Trading through several brokers adds a further step, or a loss sits unused at one bank while the other withholds tax.

Why do separate loss pools exist at all?

Because the legislator chose to restrict certain kinds of loss. For a trader the reasoning matters less than the consequence: not every loss is the same loss for tax purposes. What decides it is the type of transaction it came from.

Offsetting happens on two levels. Your bank maintains the pools automatically and offsets within the year as far as it can. Anything beyond that, and in particular anything spanning several institutions, only happens through your tax return.

Which offset categories currently exist?

Three areas need keeping apart.

Share losses. Under section 20 paragraph 6 of the Income Tax Act, losses from selling shares may only be offset against gains from selling shares. Not against interest, not against dividends, not against fund gains. That separate pool still exists.

Other investment income. Everything else inside the flat withholding regime shares one pool: interest, dividends, gains from funds and certificates, and since the most recent change, derivatives as well.

Private sale transactions. Crypto assets held privately fall outside the flat withholding tax and under section 23. They form an entirely separate circle with no connection to the other two.

What changed for derivatives?

A substantial change happened here that many older guides do not yet reflect.

Losses from derivatives previously had their own very narrow offset circle with an annual cap in euros. That restriction was removed outright by the Annual Tax Act 2024, retroactively and for all open cases. Since then, derivative losses can be offset against all investment income rather than only against similar gains.

One practical detail belongs with it: banks are only required to reflect this in ongoing withholding from 1 January 2026. For earlier years your broker may still have withheld under the old system, with the correction running through your tax return. So check your statements rather than assuming the bank already handled it.

A worked example

Suppose a year produced the following results. The figures are illustrative:

Share sales: 3,000 euros in gains
Other share sales: 5,000 euros in losses
Dividends and interest: 2,000 euros

Share losses are offset against share gains first, so 5,000 against 3,000. That leaves 2,000 euros of losses in the share pool. Those may not be offset against the 2,000 euros of dividends and interest, even though the amounts happen to match.

The result: tax falls due on the 2,000 euros of dividends and interest to the extent the saver's allowance is used up, while the 2,000 euros of share losses stay put and carry forward into the following year. This constellation surprises people regularly.

How do you offset across several brokers?

Your bank only knows the transactions that happened with it. Losses at broker A and gains at broker B therefore create a problem: broker B withholds tax while an unused loss sits at broker A.

The route through is a loss certificate under section 43a. The deadline matters: you have to request it by 15 December of the relevant year from the institution holding the losses. Miss it and the loss stays in that pool and carries forward automatically instead of being offset in the current year.

With the certificate you declare both sides in your tax return and the offsetting happens there. One side effect worth knowing: requesting the certificate resets the pool at that broker to zero.

What does the broker handle automatically, and what not?

Knowing this boundary prevents most surprises, because traders typically assume far more automation than actually happens.

Handled automatically: a German broker maintains the loss pools, offsets within a pool across the year, withholds tax when a gain remains after offsetting, and refunds tax already withheld during the same year if losses arrive later. It also applies any exemption order you filed.

Not handled automatically: anything beyond that one institution. Losses at another broker are simply invisible to it. A loss carryforward for future years is not assessed unless you declare it. And with a foreign provider the automation disappears entirely, leaving the whole calculation to you.

For crypto the second point applies in a particularly clear form: because it sits outside the withholding regime, there is neither provider side offsetting nor a statement in the familiar sense.

A simple division of labour follows. The broker statement is your starting point for what happened with that broker. Your own records are the only source for the picture across all accounts, and only that complete picture reveals whether December calls for action.

What happens to losses left over?

They do not expire. Losses that could not be offset in the current year carry forward into the corresponding offset category of the following year and remain available there.

What matters is that they get formally assessed at all. Losses you never declare produce no assessed carryforward, and you cannot draw on them later. Crypto under section 23 follows its own rules on timing, which differ from those in the withholding regime.

What should you document?

Your broker's tax statement is the foundation but rarely sufficient alone. Keep these details independently:

Type of transaction per trade, because it determines the offset category.
Acquisition date and cost, particularly for crypto and for holdings that arrived from another provider.
All costs, so your result is correct before any tax consideration begins.
Separation by broker, so you can see where a pool is sitting unused.

The last point is what makes the December deadline visible in the first place. Anyone reviewing only in spring has already missed the decision. A structured trading journal helps less with the tax itself than with spotting the need to act in time. What role broker choice plays here is covered in comparing trading brokers.

An open legal question on share losses

The restriction confining share losses to share gains is legally contested. The Federal Fiscal Court considers it unconstitutional and referred the question to the Federal Constitutional Court. A decision is pending.

Practically that means: if this restriction affects you, keep your documentation complete and discuss with a qualified tax adviser whether and how to keep your assessment open. Nothing about the outcome can be inferred from an ongoing case, but the recommendation to throw nothing away certainly can.

Conclusion

Loss offsetting is not an optimisation trick but a question of correct allocation. Share losses stay in their own pool, other investment income shares a common one, and crypto sits entirely outside the withholding regime. The restriction on derivatives has gone, though banks are only required to reflect it in withholding from 2026. The one date to remember is 15 December for the loss certificate.

Disclaimer: this article gives a general overview as of August 2026 and is not tax or legal advice. The example figures are illustrative. Tax law changes, and treatment depends on your personal circumstances. Discuss your situation with a qualified tax adviser.

Loss pools apply before the saver's allowance, which ties the two topics together. For setting up the exemption order correctly and splitting it across brokers, see the dedicated guide.

Offsetting Trading Losses in Germany: How the Pools Work