Important changes

• All tax returns must be submitted digitally starting January 1, 2025. Exceptions apply to pensioners and employees who have no other taxable income besides wages or pensions.
• The cheapest public health insurance provider is not cheap anymore. From 1 May 2025, BKK Firmus will increase its additional contribution from 1.84% to 2.18%. In comparison, TK's additional contribution is 2.45%. If you are insured in Barmer, AOK, or any other public health insurer, you are paying more for the same services. Use our calculator to check the premium you are paying and the savings potential.
• The electronic patient record (ePA) will be available Germany-wide from April 29. All medical practices must implement ePA infrastructure by October 1.

Electronic patient records - What you should know

What is an electronic patient record (ePA)?

ePA is a step forward in Germany's effort to digitalize/modernize its aging infrastructure. As the name suggests, your medical data will be stored electronically in a central place.

• You have complete control over what data you want to share and with whom.
• You can also decide if you wish to participate in ePA or not.
• You can manage your medical records via your health insurer's mobile app.

Advantages of the ePA

• ePA allows doctors, hospitals, and pharmacies to view and add to your medical history. This is especially convenient during emergencies.
• Doctors can view past diagnoses and prescriptions with a click of a button. So, no more requesting the medical records from your doctors and receiving them in your letterbox.
• You can view all your medical history in your insurer's mobile app. Thus, increasing transparency.

What are the disadvantages?

• Having all your data stored in a central place exposes the risk of data leaks or misuse.
• You can only access your ePA records via your public health insurer's mobile app.
• In case of doubt, your treating physicians can view your entire medical history, even if you don't want them to.

How can you object to ePA?

If you don't want to participate in ePA, you can object to your health insurance provider online. Every insurer provides this service on its website.

Here is the link for TK. You must log in to your TK account to access the link.

Important to know

• Your doctor's practice can access your medical records by inserting your health insurance card into their reader unless you revoke access in the app or directly at the practice.
• The clinic must inform you when they save new findings and diagnoses to your ePA – either verbally or by posting a notice.
• It's a big rollout, so the probability of something going wrong is high. Thus, verify the data your doctors are uploading to the ePA.
• If you don't want specific diagnoses (mental problems, STDs, etc.) or data to be stored in your ePA, inform the clinic about the same.
• If you switch your health insurance provider, your ePA will be transferred automatically. You just have to re-register using your new health insurance provider's ePA app.

Master Heating During Unpredictable Weather

I hope you are excited about the warm season on the horizon. However, the weather in Germany is quite unpredictable and can vary drastically within a day.

There are days when you sweat and days when you need to wear a jacket. So, how do you heat your home in an energy-efficient way during this period?

Rule of thumb

Heat your home evenly and not at extreme levels (high or turned off).

The problem with turning the heating off completely during warmer weather is that you must heat very hard when the weather gets colder. This takes more energy than heating at moderate temperatures during the whole period.

Conclusion

Leave the heating running at the lowest setting until the warm weather settles in. Instead of increasing the temperature, consider wearing an extra layer of clothes on cooler days.

You can also install electronic thermostats on your radiators. They automatically adjust the heating and ensure a consistent room temperature.

You can buy them at any hardware store like OBI or online.

Risk of frost damage

Switching the heating on and off frequently can also damage the building. If temperatures unexpectedly drop below zero and the heating is off, you risk frost damage.

Usually, apartments in Germany have central heating. So, the most you can do is turn the thermostat on your radiator all the way down. However, the radiators have a "frost guard" (snowflake symbol). This protects your apartment from reaching subzero temperatures.

Strategies to protect your capital gains from high taxes

You might know that you pay 25% plus a 5.5% solidarity surcharge on your profits from stocks and interest. If you are a church member, you pay church tax on top of it.

However, there are strategies you can implement to reduce this tax burden.

• Invest in stocks ETFs
• Buy three different ETFs with a gap of 10 years between them
• If you are married, open two trading accounts - one for your partner and the other for you.
• Buy and hold physical gold over gold securities
• Buy and hold crypto for at least 1 year

Let's understand how these strategies can save you tax.

Invest in stock ETFs

If you sell an ETF comprising shares, part of the profit remains tax-free. The table below shows what percentage of profit is tax-free based on the share of stocks in the ETF.

This means if you buy and sell ETFs like MSCI World, you pay tax on only 70% of the profits. This reduces your capital gains tax from 25% to 18% (approx).

Buy three different ETFs with a gap of 10 years between them

The "first in, first out" (FIFO) principle applies when you sell ETF shares. This means the shares you bought first are also sold first.

The problem with this principle is that your old shares must have grown the most as you held them the longest. And the higher the gains, the more taxes you pay when selling.

The workaround to this problem is buying three different ETFs at different intervals.

• Start investing in ETF1 consistently every month for the first 10 years.
• After 10 years, start investing in ETF2.
• After 20 years, start investing in ETF3.

This way, when you retire and want to withdraw money by selling the ETFs, you can first sell the youngest ETF (i.e., ETF3). As you held this ETF for the shortest duration, the gains would be less than those of the older ETFs (1 and 2).

Fewer gains mean fewer taxes.

On the other hand, if you have invested in only one ETF. You would need to sell more shares to achieve the same net amount. This is because you'll sell the oldest ETF first and pay more taxes.

Open two trading accounts - one for your partner and the other for you

The tax office offers a 1000€ capital gains tax allowance. This means you don't pay taxes on the first 1000€ of profits.

You and your partner both enjoy this allowance individually. So, by opening two trading accounts, you double your tax-free allowance.

Even children enjoy this tax-free allowance. So, if you have children, open a trading account for them also.

Sell stocks to maximize tax allowance every year

If the dividend and interest income are less than the 1000€ tax-free allowance, you can sell some shares at a profit to fill the gap.

This way, you can sell some shares and book a profit tax-free.

Here is how you do it

• In December, check the total dividends and interest you earned for the year. Let's assume you earned 200€. This means you still have 800€ of tax-free allowance left.
• Sell some of the shares to reach a net profit of around 800€. This profit is tax-free. Hence, you will save 224€ in capital gains tax.
• Buy the sold shares again immediately. This ensures minimal price fluctuation.

You repeat this strategy with your partner's and children's trading accounts.

Physical gold over gold securities

• You pay no capital gains tax if you sell physical gold (bar, coins, jewelry, etc.) after one year.
• If the gold bars have a purity of at least 995 parts per thousand, you don’t pay VAT.

Unfortunately, the tax office treats gold securities like stocks for tax purposes. Thus, you pay capital gains tax regardless of your holding period.

Hold crypto for at least one year

You pay tax on the profits from the sale of your cryptocurrency according to your personal tax rate. However, you pay the tax only if you sell your investment within one year.

Takeaway

• Invest in ETFs made up of stocks, and pay no tax on 30% of the profits.
• Buy three different ETFs with a gap of 10 years between them
• Open a trading account for your partner and for you.
• Sell some stocks each year to maximize tax-free allowance.
• Buy and hold physical gold for at least 1 year
• Buy and hold crypto for at least 1 year

You can open a free depot account with Scalable Capital*, Finanzen.net Zero*, Smartbroker+*.

Latest News

• Bavaria approves three cannabis clubs. Despite criticism of cannabis legalization, the number of registered drug offenses in Bavaria fell by around 39 percent in 2024, and cannabis offenses by 56 percent. [1]
• Speculation grows about repairing the sabotaged Nord Stream pipelines to resume Russian gas imports to Germany. However, things are still unclear. [1]

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