Germany is a prosperous, democratic country with a highly skilled labour force, a large capital stock, a low level of corruption, and a high level of innovation.
Being an innovation-driven economy, Germany is among the world's largest and technologically advanced producers of chemicals, machinery, vehicles, machine tools, electronics, automobiles, food and beverages, textiles.
The history of banking in Germany dates back to the 15th century. The oldest bank still operating in Germany, is Berenberg Bank, founded in 1590. Nowadays Germany has "three-pillar banking system" consisting of private banks, cooperative banks and public savings banks.
|Population (2016)||82 162 000 (+0.01%)|
|EU Status||member since 1952|
|National Currency||EUR (Euro) since 1 January 1999|
|Nominal GDP (2015)||3 026.6 bln EUR (+0.04%)|
|Nominal GDP per Capita (2015)||37 100 EUR (+0.05%)|
|Real GDP Growth (2015)||1.7 % (2014: 1.5 %)|
|CPI, MoM (Sep 2016)||0.0 % (Aug 2016: -0.1 %)|
|CPI, YoY (Sep 2016)||0.5 % (Aug 2016: 0.3 %)|
|CPI, Year Average (2015)||0.1 % (2014: 0.8 %)|
|Unemployment Rate (2015)||4.6 % (2014: 5.0 %)|
|Government Bond Yield (Sep 2016)||-0.09 % (Aug 2016: -0.13 %)|
|Credit Ratings (as of Sep 2016)|
|Fitch||AAA||highest credit quality, outlook stable|
|Moody's||Aaa||prime, outlook stable|
|Withholding Tax||0.0 - 26.0%|
|Double Taxation Agreements||96 signed agreements|
|Exchange on Request||22 signed agreements|
|Automatic Exchange||starts in September 2017|
|FATCA||IGA in effect since 31 May 2013, Model 1|
|Financial Market Development||4.9 (max 7.0)||rank: 20th out of 138 countries|
|Banks' Soundness||5.4 (max 7.0)||rank: 45th out of 138 countries|
|Banking Industry Country Risk||2||(1 - lowest risk, 10 - highest risk)|
|Deposit Guarantee Scheme|
|Maximum Protected Amount||100 000 EUR|
|Country Ceiling for Deposits|
|Local Currency (Euro)||Aaa||prime|
|Deposit Rates (Aug 2016, EUR)||0.33 % (Jul 2016: 0.27 %)|
|Banking Sector Structure|
|Number of Banks||1727|
|Recent Changes (2015)||new banks: 5, closed banks: 39|
|Consolidated Assets (2015)||6 954.90 bln EUR (-1.52%)|
|Commerzbank AG||Bayerische Landesbank|
|Deutsche Bank AG||Norddeutsche Landesbank GZ|
|UniCredit Bank AG||HSH Nordbank AG|
|List of Banks in Germany|
Germany joined the Euro Area on 1 January 1999.
According to Eurostat, nominal GDP of Germany in 2015 was 3 026.6 bln EUR.
Germany underperforms the European Union in terms of real GDP growth with the average annual differential coming to -0.1% over the past 10 years (2005 - 2015). In 2015 real GDP growth was 1.7% which was above the Euro Area average (1.6%) and below the European Union average (1.9%). Real GDP growth in 2016 - 2021 are IMF's estimates.
In 2015, nominal GDP per capita in Germany was 37 100 EUR.
Germany has an above-average level of wealth in terms of per-capita GDP at purchasing power parity (PPP); this economic welfare indicator has, on average, exceeded that of the European Union by 20.5% over the past 10 years (2005 - 2015). GDP per capita at PPP in 2016 - 2021 are IMF's estimates.
According to Eurostat, inflation rate in Germany in 2015 expressed as annual percentages of average consumer prices was 0.1% which was above the Euro Area average (0.0%) and above the European Union average (0.0%). Inflation rates in 2016 - 2021 are IMF's estimates.
Withholding taxes are imposed at source of income and are often applied to dividends, interest, royalties, rent and similar payments. The rates of withholding tax are often reduced by double taxation agreements.
Withholding tax rates applied on payments of interest and dividends in Germany are shown in Table 1.
|Natural person, resident||26.0||26.0|
|Natural person, non-resident||26.0||0.0|
Double Taxation Agreement (DTA) is an agreement between two or more countries for the avoidance of double taxation.
Germany signed DTAs which already came info force with the following jurisdictions (for agreements which came into force after 01 January 2013 the date of coming into force is given in brackets):
There are also several agreements between Germany and other jurisdictions which were signed but haven't yet come into force (for agreements signed after after 01 January 2013 of signing the agreement is given in brackets):
There are 3 ways for jusrisdictions to exchange information on tax matters:
Tax Information Exchange Agreements (TIEAs) enable exchange of information on request relating to a specific tax investigation, either criminal or civil.
Germany signed TIEAs which already came info force with the following jurisdictions (for agreements which came into force after 01 January 2013 the date of coming into force is given in brackets):
There are also several agreements between Germany and other jurisdictions which was signed but haven't yet come into force (for agreements signed after 01 January 2013 of signing the agreement is given in brackets):
Automatic information exchange allows jurisdictions to exchange information automatically, without having a specific tax investigation.
Germany signed the automatic information exchange agreement on 29 October 2014 and committed to start the automatic information exchange in September 2017.
Foreign Account Tax Compliance Act (FATCA) which became law in the United States in March 2010, focuses on reporting made by foreign financial institutions about financial accounts held by US taxpayers or foreign entities in which US taxpayers hold a substantial ownership interest. The FATCA-reporting is facilitated by Intergovernmental Agreements (IGAs).
Germany has FATCA agreement with the U.S. in effect since 31 May 2013 (Intergovernmental Agreement Model 1). Financial institutions operating in Germany are required to identify U.S. taxpayers by January 1, 2017 and to report the information for 2017 and the subsequent years. The agreement is reciprocal: German financial accounts hold in U.S. financial institutions will be reported to German authorities.
FATCA and European countries
According to World Economic Forum's Global Competitiveness Report 2016-2017, financial market development in Germany is scored 4.9 out of maximum 7.0 and ranked 20th out of 138 analysed economies. Soundness of banks is scored 5.4 bringing Germany into the 45th place, trustworthiness and confidence of financial market is scored 4.9 (32nd place).
Banking Industry Country Risk Assessment (BICRA) is a methodology designed by Standard&Poor's "to evaluate and compare global banking systems". A BICRA is scored on a scale from 1 to 10, ranging from the lowest-risk banking systems (group 1) to the highest-risk (group 10). The BICRA methodology has two main analytical components: "economic risk" and "industry risk". Each of the components is then further divided into 3 "factors" that result in an economic and industry risk score for each country.
Germany is included into group '2' with economic risk scored '1' and industry risk scored '3'.
|Economic resilience||very low|
|Economic imbalances||very low|
|Credit risk in economy||low|
|Systemwide funding||very low|
|Government support assessment||supportive|
Deposit Guarantee Schemes compensate certain deposits held by depositors of a bank that becomes unable to meet its obligations.
From a depositor's point of view it is important to know:
All these details about deposit guarantee scheme in Germany are summarised in Table 3.
|Scheme Participants||all credit institutions operating in Germany, branches of non-EEA banks, branches of German banks abroad|
|Scheme Exemptions||branches of EEA-banks (covered by their home countries)|
|Covered Accounts||all deposit accounts (deposits on current accounts and savings accounts, overnight money or time deposits, registered savings bonds, and similar)|
|Covered Currencies||EU currencies|
|Maximum Protected Amount||100 000 EUR|
|Paid In Currency||EUR|
Table 3. Deposit guarantee scheme in Germany.
EEA stands for European Economic Area and consists of all EU member states plus Liechtenstein, Norway and Iceland.
EU currencies are all official currencies of EU Member States.
So, only the deposits made with German banks in the following currencies are covered by the deposit guarantee scheme of Germany
|RON||Romanian new leu|
It should be also noted that deposits made in non-EU currencies (for example, CHF, USD and JPY) are not covered by the German deposit guarantee scheme.
Deposit Guarantee Schemes in Europe
Moody's country ceilings for deposits specify the highest rating that can be assigned to local- or foreign- currency denominated deposit obligations of a bank or other deposit taking institution domiciled within that country.
Local currency (Euro) deposit ceiling for Germany is set to Aaa (prime), foreign currency deposit ceiling is Aaa (prime).
Compare Bank Deposits in Germany
Currently there are 1727 credit institutions operating in Germany.
Recent structural changes (2013 - 2015) of the banking sector of Germany are summarised in Table 4.
|Number of Opened Banks||5||8||5|
|Number of Closed Banks||27||40||39|
Table 4. Recent structural changes in the banking sector of Germany.
All the credit institutions operating in Germany can be classified into several categories. Table 5 summarises the number of banks in each category.
|Category||Number of Banks|
|Branches of foreign banks||107|
|Private banks (Bankhäuser)||20|
|Private building and loan associations (Private Bausparkassen)||12|
|Public sector building and loan associations (Landesbausparkassen)||8|
|Savings banks (Sparkassen)||403|
The list of the most recently opened banks in Germany is provided in Table 6.
|PKO Bank Polski S.A. Niederlassung Deutschland (new)||October 2015|
|WEG Bank AG (new)||June 2015|
|Goldman Sachs International Bank Zweigniederlassung Frankfurt (new)||April 2015|
|KT Bank AG (new)||March 2015|
|Nordea Bank AB Niederlassung Frankfurt am Main (new)||January 2015|
|CGA - Compagnie Générale d'Affacturage Niederlassung Deutschland (new)||December 2014|
|Toyota Material Handling Commercial Finance AB, Deutschland (new)||December 2014|
|RBC Europe Limited Frankfurt Branch (new)||November 2014|
|Agricultural Bank of China Limited Frankfurt Branch (new)||October 2014|
|KBC Bank NV, Niederlassung Deutschland (new)||August 2014|
Table 6. The most recently opened banks in Germany.
There are 107 branches of foreign banks from 24 different countries in Germany. Table 7 shows 10 countries having the biggest number of branches in Germany.
|Country of Origin||Number of Branches|