How to file your tax return in Germany (Checklist)

With our checklist, you will master your tax return in Germany in no time! Ready to get between 800€ - 1000€ back from your tax return?

Marle

7 minute read

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Updated on 5 Aug 2024

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Living

Did you know that a tax return in Germany has given back an average of €800 to €1,000 to a German taxpayer over the last years? As you can see, anyone who doesn't go through a tax return in Germany is truly giving away real cash!

But being an international in Germany, your tax return proves to be a hurdle: on the one hand, there's the language as a barrier; on the other hand, the German tax system differs from the one you're familiar with. But don't fret, once you've mastered your tax return in Germany, the money bliss quickly fades away the stress.

Let's go step by step through the tax return in Germany. With our checklist, you won't miss a detail, promise!

It’s as simple as that: there's money waiting to be picked up from you!

Disappointment strikes many internationals when they hold their net salary in their hands for the first time at the end of the month. After all, your employer automatically deducts income tax from your gross salary and transfers your social security contributions directly to the insurance company. So once all payments have been received by the tax office, a relatively slim net salary will land in your bank account.

In fact, did you know that Germany is the second most heavily taxed country in the world right after Belgium? By the time your first net salary arrives, you'll clearly feel that your net salary becomes a lightweight version of your gross salary.

Here's the good news! You can file your tax return at the end of the year and with a little luck, you'll get money back for taxes you paid too much!

As a matter of fact: to be precise: In 9 out of 10 cases the taxpayer gets money back after filing the tax return!

So, what are you waiting for?

First things first: At which point do I have to file a tax return and when is it voluntary in Germany?

Short and sweet, you cannot avoid filing a tax return in Germany if you:

• had several employers at the same time in the year.
• you have received untaxed income exceeding 410 EUR (pension, fees, rental income).
• you have received wage replacement benefits (parental allowance, short-time work allowance, unemployment benefit).
• you are married and both partners are registered in tax bracket IV or one spouse is registered in tax bracket V.
• Divorced and married in the same year

Determining whether you should file a tax return as a student in Germany largely depends on your income situation. You should consider filing if:

• You earn income from self-employment that exceeds the annual student tax allowance of €9,408.
• Your rental income or capital income goes beyond €9,408 per year.
• You find yourself employed by multiple employers, placing you in tax class VI.
• You've applied for tax allowances on your income tax card.

If these scenarios apply to you, filing a tax return becomes a necessity. Even if your income is below the tax-free threshold, it's a smart move because your employer might have deducted income tax from your earnings, which you can potentially reclaim at the end of the year.

Regardless of your income level, filing a tax return is a savvy financial choice for students in Germany. Here's why:

Tax refunds in Germany

In Germany, a tax refund means you can receive money back from the government when you've paid more income tax than required. This makes filing a tax return essential. You can generally claim a tax refund if:

• Your annual income falls below the tax-exempt threshold.
• You've taken up part-time work or had a fixed-term contract in Germany.
• There has been an incorrect classification of your tax payments.
• You've financially supported family members in your home country.
• You've paid rent both in Germany and your home country.
• You've incurred expenses for flights to and from Germany.

Tax deductions in Germany

Tax deductions in Germany, known as "Steuerabzüge" or "Steuerermäßigungen," are expenses or allowances that can be subtracted from your taxable income, reducing the overall income subject to taxation. These deductions lower your tax liability, resulting in a lower tax bill.

In Germany, there are various types of tax deductions, including:

1. Work-related expenses: Commuting costs, expenses for professional development, and costs associated with a home office.

2. Child-related expenses: Childcare costs, school fees, and other child-related expenses.

3. Healthcare Costs: Medical and dental expenses, including insurance premiums and out-of-pocket expenses.

4. Education Expenses: Tuition fees and educational expenses, particularly for vocational training and higher education.

5. Donations: Contributions to recognized charities and non-profit organizations.

6. Homeownership: Mortgage interest, property tax, and home improvement costs.

7. Pension Contributions: Payments into retirement accounts and pension plans.

8. Special Deductions: Additional deductions such as disability-related expenses or care of elderly relatives.

Preparation is key! So make sure to add the one or two things to your to-do list before you file your tax refund in Germany:

1. Your tax number (Steuernummer)

13 digits given to you as a taxpayer by the local tax office. Your tax number is based on your place of residence and will change as soon as you move and a new tax office is in charge of you. You can find your tax number in the top left-hand corner of every income tax assessment and on your income tax certificate issued by your employer. Watch out: your tax number (Steuernummer) is not the same as your tax identification number! Your Tax Identification Number (Steueridentifikationsnummer) is a permanent and nationally uniform identification number that you receive upon registration in Germany.

Are you a freelancer in Germany? Then you got your tax number at the tax office (Finanzamt) and put it on all your bills so that you can get paid.

2. Double taxation: true or no? All your income, no matter if it is domestic or foreign, has to be taxed. And vice versa, your home country may also require you to pay taxes. With many countries, Germany has tax treaties so that you don't have to pay double taxes on your income. Make sure that you don't have two tax offices chasing you!

3. Get all forms Each taxpayer has a different fiscal background and so there are forms for all of us. By the way, you can deduct many things from your taxes in Germany - whether church tax or your donations. Should you have distinct language barriers, it pays off to use a tax consultant, at least for the first time.

4. Register with ELSTER Fill out your tax refund in Germany digitally in no time with ELSTER!

5. Meet your deadlines Your tax refund deadlines depend on whether you have to file a voluntary or mandatory tax return.

Check? Check! Let's go through your tax return step by step.

There's no doubt, preparation is a must: Before you rush to fill out your tax return in Germany, you need to gather all the relevant forms. A tax return in Germany is obviously an individual matter, everyone has a different fiscal background.

Your task now is to find the relevant forms that are essential for your individual tax return in Germany:

• Cover sheet(Mantelbogen): This form is the basic tax form for your income tax return containing your personal details, tax number and bank account information.
• Annex N: for employees, i.e. non-independent work (wages, income-related expenses, employee savings allowance, etc.)
• Appendix N-Aus: for employees with foreign employment
• Annex N-Gre: for employees from non-independent work for cross-border commuters Baden-Württemberg to Austria, Switzerland and France (foreign income)
• Annex AUS: for all who receive foreign income and the crediting of foreign taxes
• Annex S: Income from self-employment
• Annex EÜR: For self-employed persons, freelancers and farmers and foresters in the case of a revenue-surplus calculation
• Annex KAP: for all who save (capital assets)
• Annex R: for pensioners (pension and recurrent benefits)
• Annex AV: for pension provision (contributions to the pension scheme)
• Annex V: for landlords (income from renting and leasing)
• Annex Kind: for parents (information about the child/children)
• Annex VL: for all who save (capital-forming benefits)
• Annex Extraordinary editions: Consideration of church tax, donations and membership fees, vocational training costs (without insurance expenses and pension contributions).
• Annex Pension Expenses: The "Annex Pension Expenses" to the income tax return concerns the deduction of contributions to pension schemes, health and nursing care insurance and other insurance policies.
• Annex Exceptional charges: Consideration of extraordinary burdens, e.g. medical expenses, lump sums.
• Annex Household related expenses: Household-related employment relationships, services and craftsmen's services.
• Annex Other: e.g. application for splitting the deductions in the case of individual investments of spouses/partners, loss deductions, donations carried forward, remaining tax-free amounts for protected old shares in investment funds.

Don’t forget, after all you can deduct many professional expenses from your tax declaration in Germany, as well as church tax or other expenses.

You can even offset labour costs around your house (even as a tenant!) against tax. So if you have a cleaner, gardener or craftsman, you can deduct these from your tax bill. Make sure you keep all receipts, as the tax office may want to have your expenses documented.

Did you find out which forms you need for your tax declaration in Germany? Then get your relevant forms either at your local tax office or at the citizens' office. Simply visit the homepage of the tax office in your city.

It's much easier - and truth to be told, more “2020ish” - with the electronic tax return. The top choice is the free tax return program ELSTER, a software that simplifies your tax return and gives you tips on filling it out. On ELSTER you can download the necessary forms or fill them out digitally, print them out and send them to the responsible tax office.

By the way: In Germany, taxes and tax declarations are handled by the individual federal states. This means that your local tax office is responsible for your tax return. At the Federal Central Tax Office (Bundeszentralamt für Steuern) you can find your local tax office.

When it comes to the deadline for your tax return, it makes a big difference whether you submit it voluntarily or are obliged to do so.

Anyone who files a tax return voluntarily can wait 4 years to complete it and submit it to your local tax office. This means for you: you have to submit your tax return from 2016 by 31.12.2020. A real bliss for procrastinators!

It’s different if you don't have a choice but to file a tax return.

With a mandatory tax return you have until 31 July each year to submit your tax return for the previous year.

In fact, you even have until 31 December of each year to file your tax return for the previous year when a tax consultant takes over for you!

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