In short
- Forex trading is legal in Germany and supervised by BaFin.
- Retail clients get ESMA protections: 1:30 leverage on majors and no losses beyond the account.
- Profits are usually taxed at 25% Abgeltungsteuer + 5.5% solidarity surcharge (≈ 26.4%), plus church tax if applicable.
- Foreign brokers typically don't withhold tax — you declare gains yourself.
Best forex brokers for German residents
| Broker | Entity serving Germany | Platforms | Retail loss rate |
|---|---|---|---|
| Pepperstone | Pepperstone GmbH (BaFin) | MT4, MT5, cTrader, TradingView | 72.9% |
| IG | IG Europe GmbH (BaFin) | IG platform, MT4, ProRealTime | 74% |
Looking for the best forex broker in Deutschland? Both run German entities supervised by BaFin. See also BaFin-regulated brokers.
Who regulates forex in Germany?
The Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) supervises banks and investment firms in Germany. German residents can use brokers authorised directly by BaFin, or brokers authorised in another EEA country (for example by CySEC or the Central Bank of Ireland) that have passported their services into Germany.
Retail protections in Germany
- No additional payment obligations: BaFin restricted CFDs with a "Nachschusspflicht" back in 2017 — retail clients can't be required to pay in more than their account balance.
- ESMA leverage limits: 1:30 on major currency pairs, 1:20 on minors and gold, lower on other assets.
- 50% margin close-out and a ban on bonuses and incentives.
- Risk warnings showing each provider's percentage of losing retail accounts.
How forex profits are taxed
For private individuals, gains from CFDs and other derivatives are generally capital income (Kapitalerträge):
| Item | Rate / amount |
|---|---|
| Flat withholding tax (Abgeltungsteuer) | 25% |
| Solidarity surcharge | 5.5% of the tax |
| Church tax | 8–9% of the tax, if you're a member |
| Saver's allowance (Sparerpauschbetrag) | €1,000 per person (€2,000 for jointly assessed couples) |
Without church tax, the combined rate is about 26.375%. A previous €20,000 annual cap on offsetting losses from derivatives was abolished in late 2024, so derivative losses can once again be offset against capital gains under the general rules — confirm the current position with a tax adviser.
Domestic vs foreign brokers
German banks and brokers withhold tax automatically. Most foreign brokers don't, so you must report your gains and losses in the Anlage KAP of your annual tax return. Keep the broker's annual statements.
Choosing a broker as a German resident
- Check the broker on BaFin's company database, or on its home regulator's register plus BaFin's list of passported firms.
- Confirm the legal entity in your client agreement is EU-authorised.
- Look for a German-language platform and support if you need it.
- Consider whether a broker that withholds German tax would save you paperwork.
Worked tax example
Anna, a single German resident who isn't a church member, makes €6,000 net profit from CFD trading with a foreign broker in a year and has no other capital income.
- Net capital income: €6,000
- Minus saver's allowance: €6,000 − €1,000 = €5,000 taxable
- Abgeltungsteuer: €5,000 × 25% = €1,250
- Solidarity surcharge: €1,250 × 5.5% = €68.75
- Total: about €1,318.75, declared in Anlage KAP because the foreign broker didn't withhold it
If your personal income tax rate is below 25%, you can apply for a lower-rate assessment (Günstigerprüfung).
Popular pairs for German traders
- EUR/USD: the most liquid pair, tightest spreads
- EUR/GBP, EUR/CHF, EUR/JPY: euro crosses driven by ECB policy
- Germany 40 index CFDs: often traded alongside FX by German retail traders
BaFin warnings
BaFin publishes warnings about unauthorised firms offering financial services in Germany. Check the list for any broker that contacts you, and be particularly cautious with unsolicited calls and social-media ads promising easy profits.
Frequently asked questions
Is forex trading legal in Germany?
Yes. German residents can trade forex and CFDs with brokers authorised by BaFin or passported into Germany from another EEA country.
How are forex profits taxed in Germany?
Gains from CFDs and similar derivatives are generally capital income, subject to the 25% flat withholding tax (Abgeltungsteuer) plus solidarity surcharge and church tax where applicable, after the €1,000 saver's allowance.
Do foreign brokers withhold German tax?
Usually not. If your broker doesn't withhold German tax, you need to declare your gains in your tax return (Anlage KAP).
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Most retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Tax information is general and based on rules at the time of writing. Consult a Steuerberater for your situation.