The German tax system is regulated to make no difference between German citizens and non-citizens. If you have worked in Germany, all year round or seasonally, you are required to pay income tax. Wage tax (Lohnsteuer) is deducted in percentage from the monthly salary, according to the system of cold progression (German Kalte Progression).
Depending on the amount of earned income and taxes paid, a person can exercise the right to a refund of prepaid taxes within 4 years.
You are obliged to submit the tax return to the competent Tax Administration service by July 31st of the following year.
There is a cold progressive tax system in Germany which means the more you earn, the more taxes you will pay. The amount of income tax (German: Lohnsteuer) ranges from 14% to 45%, and earnings are taxed only if you have earned more than the minimum annual salary. Every year, the Ministry of Finance announces the amount of the minimum non-taxable salary, the so-called Grundfreibetrag If your salary was below the annual minimum, you are not obliged to pay taxes, which means that you can refund the entire amount of paid income tax.
The amount of non-taxable earnings changes every year and follows inflation.
The following is deducted from your salary on a monthly basis:
Of these taxes, you are entitled to a refund of income tax and solidarity benefits. The amount of tax refund depends on the amount of earnings. The rest of the taxes are not refundable for citizens of the European Union. For non-citizens of the European Union, there is a possibility of refunding the pension insurance, but only under the condition that you do not work within the European Union for the next two years.
The amount of tax refunded to you depends on your gross income, withholding tax, and the tax class in which you were registered. In the German tax system, taxpayers are divided into six tax classes. The tax class is directly related to your family status.
At the end of the tax year, you will receive a Lohnsteuerbescheingung from your employer. This document is the official tax return document.
Citizens of Germany and all those who have registered residence in Germany are obliged to submit a request to the tax administration no later than July 31st of the following year. If you worked as a seasonal worker (or through an International work assignment), you voluntarily apply and are entitled to a tax refund within four years.
If you apply for a tax refund from Germany once, you are obliged to apply for every year of work in Germany.
At the end of the fiscal year, the employer is obliged by law to provide his employees with the Lohnsteuerbescheinigung. This form is the most important document for a tax refund. You will have one Lohnsteuerbescheinigung list for each employer. The more employers you have in Germany, the more Lohnsteuerbescheinigung lists you will have.
According to the law, the employer is obliged to electronically submit to the Tax Administration the calculation of your annual salary (Lohnsteuerbescheinigung lists) no later than February 28th for the previous year. As a rule, the employer gives the printed version of the Lohnsteuerbescheinigung list to the employee with the first salary calculation in the following year. If you do not receive the report by February 15, you need to contact the employer and ask them to forward it to you by e-mail or regular mail.
It is very important to check that the information provided by the employer on the list is correct.
If you have any doubts or questions about the tax refund from Germany, feel free to contact us.
In order to identify taxpayers and have clearer records in the system, the Finanzamt assigns a personal identification number to each individual - Identifikationsnummer. Everyone who has registered residence in Germany receives their personal identification number. This eleven-digit number is the number used in all tax claims. It cannot be changed, it has no limited validity, it is valid for life. Once you receive this number, Tax Administration Service has you under that number in the system. The information that is directly related to your number in the tax system is your name and surname, maiden name (if necessary), the current address of residence, education, date and place of birth, gender and the competent tax administration. The identification number is always given in the format 11-222-333-444.
In 2007, the German government introduced the tax number Steuernummer, as the main element of the eGovernment development strategy, with the aim of creating a unique database and reducing the possibility of tax evasion. If you did not receive your Steuernummer during your stay in Germany, you will be assigned a number after you have submitted your first tax return. Married couples who submit a request to the tax office together receive a joint tax number. The tax number is issued by the local tax administration to which you belong. If you move or divorce, the tax office will issue you a new tax number. The tax number is always given in the format 111/222/33333.
When you receive your Steuernummer, it is necessary to deliver it to your employer, so that all your earnings and taxes paid are recorded in the tax system.
One of the factors that affect the amount of income tax is your tax group, i.e Lohnsteuerklasse (Steuerklasse). The tax group is one of the most important criteria in calculating how much money an employer should pay to the Tax Administration Service (Finanzamt) in the name of taxes. There are 6 tax groups in Germany. The name of the group is determined by the Roman numeral. To which group you belong depends primarily on your marital status. If you have more than one job, you are automatically in the sixth tax group on another job.
Grundbfreibetrag represents the amount of earnings that is not taxed. This amount varies from tax group to tax group and changes every year.
|Steuerklasse I||The first tax group refers to individuals, ie. unmarried or divorced.|
|Steuerklasse II||Tax group II refers to single mothers or single fathers. The person is obliged to report the change of marital status to the Tax Authorities, in order to be transferred to tax group II.|
|Steuerklasse III||Tax group III refers to married couples, ie. to a partner who earns more. In this tax group, there will always be a partner who earns more on a monthly basis, minimum € 450. A partner who earns less will be taxed according to tax group V.|
|Steuerklasse IV||The fourth tax group refers to married people where the spouses are in the same tax group, ie. have the same or similar gross earnings.|
|Steuerklasse V||The fifth tax class includes married people whose spouse is in the third tax group due to higher gross earnings.|
|Steuerklasse VI||The sixth tax group applies to all married people, but also single people who have more jobs. If you have more than one job, you will automatically be taxed for those jobs according to the rules that apply to class VI. In the first, main job, you will be in the tax group you regularly belong to, and every other additional job belongs to class VI.|
International work assignment is an international agreement between the two countries on sending laborers to work. It comes down to an agreement between two countries in which companies from one country can send their workers for temporary business engagement to another country. Companies can only send workers who are permanently employed in their company. A work permit in Germany only applies to the company that hired you and does not allow you to work in other jobs. Clients working through detachments in Germany are registered with their employers in the first tax class.
Although most seasonal workers in Germany belong to the first tax class, most of them help their immediate family members while working in Germany. In order to reduce taxable earnings, an individual has the right to state on the tax return form that he financially helped members of his immediate family and thus get more money back. In order for the tax office to accept the above, it is necessary to submit additional documentation with the tax return form, which proves it.
Dependents may be:
Each help to the family needs to be proven, and the most common ways to send money are:
For each dependent member, it is necessary to submit a statement certified by a notary.
All the necessary documentation for a tax refund you can download here.