4.3 Erste Schritte in Deutschland
The tax return in Germany
Nine out of ten taxpayers in Germany receive a refund when they submit their annual tax return (according to data from the Federal German Statistics Office). Anyone who has earnings in Germany can claim back part of the income tax which they have paid throughout the year.
If you are employed, you will pay regular tax and social insurance contributions. The amount of tax you pay will depend on the amount you earn, your marital status and your tax bracket. Employment tax is withheld by your employer and transferred directly to the tax authorities.
However, any circumstances which qualify you for a lower rate of tax are not taken into account at this stage. For example, the 1000 Euro allowance for income-related expenses (Werbungskostenpauschale) can only be claimed when you submit your tax return.
To prevent you from paying tax in both Germany and your home country, Germany has double taxation agreements with most countries. To find information about your country, visit the Federal Ministry of Finance (Bundesfinanzministerium) website. You can also submit a German tax return from your home country if you have already left Germany. Just be sure to specify the details of a German current account for your refund.
How can you do your tax return?
Although you can download all the necessary tax return forms and print them out, you can also use the official software known as ELSTER (ELektronische STeuerERklärung). This tool allows you to submit your German tax return via the internet, saving both you and your tax office time. You need to sign up for an account and will then be sent a password by post.
This is a free tool, but the software is only available in (bureaucratic) German and it is very complex. Since it was developed by the Ministry of Finance, it does not give you any hints on how to save taxes or maximize your refund by showing you fields which you might have missed.
The German tax year is from January to December. You can submit your tax return for any past year from as early as 01.01 of the following year. If you are employed, you will usually receive the employment tax statement (Lohnsteuerbescheinigung) from your employer by February.
Unless you are required to submit a tax return, you have four years to send it in. For example, in 2019 you can submit your returns for 2018, 2017, 2016 and 2015 all at once and can expect to receive a few thousand Euro as a refund in one go.
If you are required to submit an income tax return (Einkommensteuererklärung), you must do so by 31.07 of the year following the one in which the income was received. While there may be penalties and interest payable if the return is submitted late, the tax office will generally send a reminder and issue a warning first.
If you are running out of time, you can always contact your local tax office (Finanzamt) before 31.07 and ask them to extend your deadline by two or three months without further explanations. These extensions are then granted automatically without any formal response by the tax office.After submitting your tax return, it takes eight to twelve weeks for the tax office to process it and pay the refund into your bank account.
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