Capital-gains-tax reporting from 2027: why the custody chain has to become visible now

The new reporting obligation for capital income and dividends under §§ 45b, 45c EStG sounds technically harmless: one report, one format, one date. Operationally it is not. Mastering the file format does not cover the risk, because the risk sits in the dataset being submitted, the custody chain behind every report.

This post covers what is operationally difficult about the new obligation, why the custody chain is the sensitive point, and what you can prepare calmly over the coming months.

What the new reporting obligation is, in plain words

The reporting obligation under §§ 45b, 45c EStG is an electronic procedure for reporting capital income and dividends to a competent authority. It covers income that falls under capital gains tax and is meant to make the parties along the custody chain traceable. Required to report are domestically listed companies (issuers) under § 45b(9) EStG and the paying agents and credit institutions under § 45b EStG; reports go to the Bundeszentralamt für Steuern (BZSt). (Source: BZSt, DPAii)

As with other reporting duties in finance, how precisely you report counts too. A report that arrives formally but has gaps in content does not fulfil the duty, and that is where the operational problem begins.

Why the date matters for those still implementing

The new obligation first applies to capital income credited to the creditor after 31 December 2026 (§ 52(44b) EStG); the procedure takes effect on 1 January 2027. (Source: BZSt, DPAii)

For a team still implementing, that means two things. First, there is a concrete cutoff date by which reporting has to work. Second, income before that date is outside the duty and income after it is inside. If the system does not map that boundary cleanly, you report too much or too little, and both are a problem.

Teams that underestimate the deadline usually plan the format, the interface and the submission, and forget that months can pass between “the format is ready” and “the data is ready”. In our experience data quality is the bottleneck, rarely the file format.

The custody chain as the sensitive point

The obligation requires the chain of custodians per position and income event to be traceable. Many houses do not have this dataset, the custody chain, as a clean input. It is spread across custodians, in reports of varying granularity, and partly only in individual people’s heads.

Reporting with gaps here causes two problems. It breaches the reporting duty in substance, even if the file arrives formally. It also weakens the basis for withholding-tax reclaim, which is less obvious, because reclaim and reporting draw on the same custody chain. A chain built carelessly for reporting is just as careless for reclaim.

In practice, treat the custody chain as one shared input dataset for reporting and reclaim, instead of as two separate tasks.

Automation without a checkpoint

It is tempting to automate the report completely. The format is known, the interface is in place, and the file can be generated and submitted in the background. Automation makes sense here, but it needs a checkpoint.

A fully automated submission without human review reports even when the data would really say “no”. A system that generates a file cannot judge on its own whether the custody chain is plausible. It checks only the rules it was given, and anything else falls through.

A four-eyes checkpoint before submission works well: someone spot-checks the generated file against the custody chain before releasing it. It takes minutes, not hours, and stops a systematic error in the chain from reaching the report, where it is hard to take back.

The checkpoint does not slow the automation down. Automation handles the repetition, the person handles plausibility, and together they are more stable than either alone.

Checklist for the coming months

If you are implementing now, you still have time, though not unlimited time. This checklist helps with the order:

• Name ownership of the custody chain: who in the house maintains the chain per fund and per income event?
• Map the cutoff date cleanly: where in the system is the boundary “income before/after cutoff” drawn, and who checks it?
• Clarify the interface to the custodian: in which format does the chain arrive, with which history, which granularity?
• Establish a checkpoint before submission: who releases the file, by which criteria, with which sample?
• Think reporting and reclaim together: do both draw from the same chain, or does each team maintain its own?
• Map deadlines in the system: certified reports by 31 March, other reports by 30 April, the aggregate by 31 July of the following year (§§ 45b, 45c EStG).

Of these points, the file format is the easiest.

On order: clarify the data basis first, then the interface, then the format. Starting with the format and checking the data last means building on an unchecked foundation. That leads to late changes and expensive rework while the deadline comes closer than the plan expected.

What happens when the chain is reported with gaps

A report with gaps rarely shows up right away. It shows up when a refund is challenged the following year, when the specialist department asks a question, or when an audit traces the chain. By then the error has settled in the system, along with the assumption that the chain was correct.

Usually there is no visible error message. The team slowly loses trust in its own data, adds extra checks to reports, builds parallel lists again and calls the custodian. The work that the standardised reporting was meant to reduce comes back through incomplete data, even though the automation runs.

So the checkpoint before submission also builds trust in the data, besides catching errors. People who have seen a report corrected before submission trust the next one more. People who have seen an error surface only the following year trust the automation less. That trust grows with experience, so the system has to show problems early and visibly.

What we learn from this

The reporting obligation under §§ 45b, 45c EStG is about more than the format. It is a reason to keep the custody chain as a visible, maintained dataset in the house, for reporting and for reclaim. Tackling it now covers both. Postponing it means fixing two processes later.

If you are working out how to set up the new reporting obligation operationally, from the data model to the checkpoint before submission, we are happy to talk. We look at where your custody chain stands today and what it needs to work for both reporting and reclaim.