Securities accounts and ETFs are often seen as a straightforward way to build wealth. However, when you move abroad, it quickly becomes clear that investments are often more tax-complex than expected. Many emigrants only realise afterwards that Germany can remain involved in their portfolio despite deregistering - whether through tax withholdings, reporting obligations or specific rules under German international tax law.
This article explains when Germany can still take its share after you have moved away, which typical situations are problematic, and why planning your brokerage account early is at least as important as deregistering your residence itself.
While income from employment or self-employment can often be clearly reallocated after a move abroad, capital assets follow their own set of rules. The decisive factor is not just your place of residence, but the interaction between the bank’s location, the type of investment and continuing economic ties to Germany.
ETFs in particular, which were designed for investors who are tax resident in Germany, often deliver their benefits only within the German tax system. If you move your residence abroad, those very benefits can turn into disadvantages. In practice, portfolios are often left running unchanged even though the tax starting position has fundamentally changed.
An account with a German bank may continue to exist even after deregistration. Many banks allow this without major hurdles. For tax purposes, however, this is by no means neutral. German financial institutions are obliged to treat tax matters conservatively. This means that even after you move abroad, withholding tax on investment income, solidarity surcharge or ETF advance lump sums may continue to be deducted.
These deductions often happen regardless of whether there is actually still a tax liability. For the investor, this creates an effective tax burden that can only be corrected afterwards - if at all. Particularly with long-term investments, these deductions can quickly add up to substantial sums.
A particular problem area is the advance lump sum on accumulating ETFs. It can apply even when no distribution is made. Many investors never notice it because no payment is received; it is simply applied for tax purposes.
After moving abroad, this lump sum can become problematic because in the new country of residence it is often not recognised as having already been taxed. The result can be double taxation: once via the German withholding and later via taxation abroad.
Especially with larger ETF portfolios, this leads to unnecessary cash outflows without any corresponding real return.
Another aspect that is often overlooked with brokerage accounts is extended limited tax liability. Under certain conditions, it can apply for up to ten years after moving away. Relevant factors include German citizenship, moving to a low-tax country and continuing economic interests in Germany.
A substantial securities portfolio can, in this context, be regarded as a relevant economic connecting factor.
In particular, if it makes up a significant part of your total assets or continues to be held with a German bank, Germany may still be able to access certain income - even without a residence or habitual abode.
Many investors rely on partial exemptions and flat-rate rules that apply in Germany. These advantages are not transferable internationally. In many countries, ETFs are classified differently, in some cases even less favourably than individual securities.
It can happen that funds are treated abroad as fully taxable or that different assessment bases are used. A portfolio that was considered efficiently structured in Germany can lead to a higher tax burden abroad than expected.
Without prior review, this effect often only becomes visible with the first tax return in the new country of residence.
What many underestimate: custodian banks, brokers and tax offices no longer operate in isolation. As soon as your tax status changes, for example due to deregistering your residence or a new overseas address, automatic reporting chains kick in behind the scenes.
German banks are obliged to pass on tax-relevant information, especially when they learn of a move abroad. This can mean that investment income continues to be classified as domestic - even if, from your perspective, you are long gone.
What matters, therefore, is not only where you live, but which information is officially on record and how it is interpreted.
Many emigrants leave their brokerage account unchanged to avoid hassle or because they do not see any immediate issues. Yet this passivity can be costly.
An unchanged German account often signals to the tax office that there is an ongoing economic connection. Even small returns can then trigger queries or audits. On top of that, tax planning options tend to narrow over time.
What could have been resolved flexibly before the move is often only correctable afterwards with greater effort - or not at all. Those who act early stay in control; those who wait usually end up merely reacting.
In practice, the broker’s location plays a bigger role than many assume. German banks are subject to extensive reporting and withholding obligations. International brokers often handle these matters more flexibly and adapt their processes to the client’s tax residency.
Switching to an international broker does not automatically mean you pay no tax. However, it can help to stop the automatic reach of the German tax system and clearly shift taxation to the new country of residence - provided the other requirements are met.
Many emigrants hope to reclaim taxes paid in excess later on. In practice, this route is time-consuming and uncertain. Refunds require detailed evidence, often lead to follow-up questions and can take several years. Not infrequently, they are granted only in part or not at all.
It is far more efficient to adjust the structure of the portfolio before moving abroad. That way, unnecessary deductions can be avoided from the outset rather than having to be laboriously corrected later.
In advisory practice, it repeatedly becomes clear that brokerage accounts receive too little attention in move-planning. They are often left unchanged, ETFs are continued without review and tax thresholds are ignored. Communication with banks is also often neglected, which creates additional risks.
These omissions do not necessarily cause immediate problems, but they significantly increase the risk of long-term tax burdens.
A securities account is not a passive element of your wealth structure once a move abroad is being planned. ETFs and German brokerage accounts in particular can mean that Germany continues to take a cut even years after deregistration.
If you want tax clarity, you should incorporate your portfolio into your emigration planning at an early stage, rather than only reacting once deductions have already been made.
A clean structure not only saves tax in the long run, but also time, stress and legal disputes.
