My German Tax Return

A step-by-step guide to file your taxes in Germany

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• Publisher: Akademische Arbeitsgemeinschaft Verlagsgesellschaft
• Year: 2024
• eBook ISBN: 9783965331310
• Edition: 1
• Topic: Personal Development
• Subtopic: Personal Finance

This is a tax guide for allemployed personswho want or need to file anincome tax return(or: tax declaration) in Germany butdo not speak much German. It explains the basics of German tax law and guides you through the most important questions and tax forms: - Where do I file anincome tax return(Steuererklärung)?- Whatdeadlinesdo I need to know regarding my tax return?- Whichtax office(Finanzamt)do I have to submit my tax return to?- May I send a German tax return byemail?- Whichexpensesare deductible in a tax return?- Are therelump sums(Pauschbeträge)or do I have to calculate every little bit?- What do all these weird words in thetax formsmean?- What do I need maywage tax certificate(Lohnsteuerbescheinigung)for?- What do tax payers mean when they talk about the"Mantelbogen"?- What the heck is"Elster", if not a magpie?- How do I fill in theAnnex N?- Is there a chance for ataxrefund?- …And so much more!It's so much easier than you think!Even for native speakers, German tax law sometimes seems rather incomprehensible. But then, most of the time, it'snot as complicatedas you may have feared! Many tax forms are actually quiteself-explanatory.Whether you do your tax return yourself or seek professional advice: This guide about filing a tax return in Germany will help you!Though you may speak little or no German, you can basicallydo your tax return yourself. But even if you use the services of a tax advisor(Steuerberater)or go to an income tax help association(Lohnsteuerhilfeverein), the following applies: only if youknow the basicsof German tax law you can point outimportant factsto your advisor that may be unusual for other taxpayers.

My German Tax Return: A step-by-step guide to file your taxes in Germany

1 Vorwort

Dear readers,

We have been dealing with tax law for a long time – and at some point we noticed that the German tax forms are not available in English. Why is that? Perhaps, it's too tricky to translate them: What if a mistake happened?

This is where we would like to step in and help you with this guide. The fact that you are willing to deal with German tax law is admirable. Even for native speakers, it sometimes seems completely incomprehensible. But then, most of the time, it's not as complicated as you may have feared! Many forms are actually quite self-explanatory.

Even though you speak little or no German, you can basically do your tax return yourself. Even if you use the services of a tax advisor (Steuerberater) or go to an income tax help association (Lohnsteuerhilfeverein), knowledge of some basics can go a long way in telling your advisor about facts that might be particular to your case, for example financial support for family members abroad.

We have based this guide on the most important tax forms for the 2020 tax return, which will be prepared in 2021. This means that when you read this guide in later years, the forms may have changed. That is why we included the original German text of the individual forms – so you can compare whether you are actually in the right place. You can download the current forms for free at www.steuertipps.de.

Since this is the first time we’re doing this your feedback is invaluable. Let us know if this helped you. Write to us at [email protected] about what helped you and what you missed or take our short survey. And if you feel comfortable with this kind of information, we will also consider translating other guides into English, which will then go into more detail.

We wish you all the best with your German tax return.

Your Steuertipps editorial team

2 Tax returns: The Basics

2.1 Who has to file a tax return?

The »unlimited income tax liability« is regulated in § 1 para. 1 of the Income Tax Act (Einkommensteuergesetz, or short: EStG).

• Only natural persons are subject to unlimited income tax liability.
• A person is subject to unlimited tax liability in Germany, i.e. with all domestic and foreign income, if he or she has his or her residence or habitual abode in Germany.

This means in detail:

»Natural persons« are all living people. Legal capacity, age, sex, marital status and nationality are irrelevant.

»Domestic« is within the Federal Republic of Germany.

Your »residence« is where you regularly use an accommodation yourself and also maintain it in the future. It is necessary that the accommodation is available to you at all times – whenever you wish – as a place to stay. There must be at least one fixed room suitable for living in, with furniture, heating and cooking facilities. This can also be a furnished room.

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Tipp: Multiple residences are possible, including residences within Germany and abroad at the same time. For unlimited income tax liability, a residence in Germany is decisive.

A »habitual abode« is where someone chooses to stay not only temporarily, but without establishing a residence. A stay of more than six months without a long-term interruption leads to a habitual residence and thus also to unlimited tax liability from the beginning.

»Unrestricted income tax liability« means that you are liable to pay tax in Germany with your global income, i.e. with all domestic and foreign income.

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Tipp: This principle of taxing world income raises problems if both the German state in which you reside as a taxpayer and the foreign state in which you earn income want to tax the same (foreign) income. Residence taxation in Germany and deduction of tax at source abroad can then lead to double taxation.

German income tax law provides for the following regulations to mitigate or avoid double taxation of positive foreign income in the case of unlimited tax liability:

• in the case of taxation of the foreign income in Germany, crediting or deduction of the foreign tax (credit method);
• in the case of exemption from taxation in Germany, inclusion of the foreign income in the progression proviso (exemption method).

Whether Germany (first case) or the other country (second case) has the right to taxation is regulated with most countries through a double taxation agreement (DTA).

You can read and download all double taxation agreements that Germany has entered into with other countries on the website of the Federal Ministry of Finance.

2.2 What is the tax identification number?

Since 2008, everyone who registered a residence in Germany was given a tax identification number (Steuer-Identifikationsnummer). However, this did not always go entirely smoothly - sometimes numbers were assigned twice or someone was forgotten.

Anyone who registers a residence in Germany after 2007 receives a tax identification number as soon as the registration office transmits the data to the Federal Central Tax Office (Bundeszentralamt für Steuern, BZSt). If the tax identification number does not arrive within three months, you can contact the BZSt.

Parents receive the tax identification number for their (newborn) children after the registration office (Meldebehörde) forwards the data to the BZSt.

If you do not find a letter with your tax identification number in your documents, contact the Federal Central Tax Office. This also applies if you have lost the letter.

There are three ways to request your tax identification number:

• Fill out the form Notification of tax identification number (Formular »Mitteilung der Steueridentifikationsnummer«) on the website of the Federal Central Tax Office.
• Send an e-mail to [email protected] and ask to be informed (again) of your tax identification number.
• Write to Bundeszentralamt für Steuern, Referat St II 3, 53221 Bonn.

You must send the following information in order to have your tax ID (re)issued:

• Surname
• First name
• Your address
• Place of birth
• Date of birth

For data protection reasons, the tax identification number is only sent by post and never by e-mail.

2.3 What belongs in a tax return?

There are some important tax return forms whose names you should know – even if you use software to fil...

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• My German Tax Return: A step-by-step guide to file your taxes in Germany