Like most countries, dealing with your tax in Germany is a bit of a headache. Add in the complication of not speaking the language and you will find yourself wanting to run from it. As we move closer to the deadline of 31st July, you may be asking yourself if you need to file a tax return and if so, how do you go about it? Well, we’re here to help.
- Is filing a tax return (eine Steuererklärung) mandatory?
- Tax returns and freelancing in Germany
- How to file a tax return in Germany
- Using an online tax system
- Going it alone and filing your tax return yourself
- What forms do you need to file your tax return in Germany?
- Things to note for your tax return
Is filing a tax return (eine Steuererklärung) mandatory?
It depends on your tax situation. For all freelancers and self-employed people it is mandatory. If you’re an employee and your situation is one of the below, then it is also mandatory that you file a tax return.
- You are married with tax classes 3 and 5, or both 4 “mit Faktor”. Your tax class is defined by your marital status, so it is worth reading about it to ensure you’re in the right class
- You divorced and married again in the same year
- You have an additional income higher than €410 in total – but that is not from your salary
- You receive a salary replacement income such as unemployment benefits that are higher than €410 in total
- You have more than one employer in that year
- You have more than two salaries – perhaps you have a mini-job as well as your full-time job
For employees who are single (i.e. no children) then it is not mandatory. However, it may be in your interest to file a tax return as you can claim money back for a variety of unexpected things, such as:
- Anything you’ve paid for that’s connected to your professional development, such as courses and books
- For any maintenance work done on your apartment, for which you’ve received an invoice and your landlord hasn’t paid for
- For your daily commute by car or public transport, provided it is not already paid for you by your company
- If you haven’t worked for a complete fiscal year. In Germany that is January 01 to December 31st
Tax returns and freelancing in Germany
If you are a freelancer (freiberuflich) or self employed and you run your own business, then it is mandatory that you submit a yearly tax return. Thankfully you have until the 31st July of the following year to submit it. So if you came to Berlin in 2019 and were registered for tax, you need to file your tax return by 31st July 2020.
But do not panic. If it is your first year here, and your first time filing a tax return in Germany, then we recommend getting the help of a tax accountant (Steuerberater). Although this can be costly, as Steuerberaters are trained and experienced in their trade, it will provide you with a three month extension on your filing date.
Of course if you’re feeling tax savvy and brave, you could file your return yourself. The submission is now all online through a system called Elster.
How to file a tax return in Germany
As mentioned above, if you’re not feeling comfortable tackling the German system and you perhaps have a complex situation – maybe you received income from abroad – then the advice would be to avail of the services of a Steuerberater.
If you don’t know where to start looking for an accountant, then check out Ageras. This handy site will – in English – connect you with an accountant that matches your needs. It’s free to sign up and apparently, the recommendations are not binding. So no harm in looking and seeing if there’s someone there you want to work with.
Using an online tax system
If you’re still a little weary of the German system, but can’t afford a tax advisor, then there are two online systems you could try.
The first, and one of the most popular for expats in Germany is Wundertax. Their website is incredibly easy to use and explains everything in detail in English or German. Wundertax also runs tailor-made tax platforms for professions like soldiers, police officers, firefighters, apprentices and students. Wundertax users get an average of €1,150 tax back.
The second is SteuerGo. At a very affordable rate of €35, it will guide you by the hand through each step of filing your tax. Unfortunately it is not equipped to handle interational payments received, so if your income was a mix of German and foreign payments, this platform is not for you.
The third platform, Smart Steuer, however, does deal with a mix of payments. Unfortunately the platform is in German, so you may need a translator to help you out. German tax language is perhaps not the most straightforward.
Going it alone and filing your tax return yourself
Thankfully Germany has reached the modern ages and all of this can be done online. The system is called ELSTER (Elektronische Steuererklärung). Do note that you need to register in advance and it can take a few days for them to send you your password by post. So don’t leave it until the last minute.
You can of course file your papers manually, however, the German Ministry of Finance (Bundesministerium der Finanzen) will be removing this option after 2022. You can download the forms directly from their website. On the right you will see “Einkommensteuer – relevant year – mit allen Anlagen”. Click on that for all the relevant forms.
Submitting with ELSTER or on your own can be straightforward, if you know what you’re doing. Thankfully the fantastic ToyTown Germany website has written out a very detailed guide in how to fill out your forms. It may seem a little overwhelming at first glance but this step by step guide is so concise and detailed that it will really help you through it all.
What forms do you need to file your tax return in Germany?
The number of forms you’re required to fill in depends on your tax situation. Here are the most common ones for Germany.
As a regular employee, you will need the following three forms:
- ESt 1 V 2019 (For general details like your address and ID Nummer)
- Anlage N 2019 (For details about your income as an employee)
- Anlage Vorsorgeaufwand 2019 (This is for your insurance)
For self-employed people, there are forms to be filled in depending on whether you are:
- a freelancer : Est 1A 2019 & Anlage S 2019
- a trader: Anlage G 2019 & Anlage GeSt 1A 2019
- if you pay V.A.T (Umsatzsteuer): Anlage USt 2019
- you’ve earned more that €17,500 in the year: Anlage EÜR
And then, just when you thought it was manageable, there are a whole lot of other common forms that you may need to fill in. Such as:
- Anlage Sonderausgaben: This is for expenses that you want to claim for, such as educational costs, pension contributions and more
- Anlage V: for any rental income
- Anlage N-AUS: for any salary income you’ve received from outside Germany
- Anlage AUS: This is for income you’ve received from outside Germany but not through a salary
- Anlage Kind: for any expenses generated from your children
- Anlage Haushaltsnahe Aufwendungen: for any expenses related to your home such as renovations and cleaning professionals
- Anlage U: for spousal support paid to former partners and spouses
- Anlage Außergewöhnliche Belastung: for “extraordinary” costs related to disabilities, traumatic events and healthcare
- Anlage Unterhalt: for any financial assistance you have provided to other members of your household
There are many other forms but these are just some of the most common ones. Again if your situation is a little complex and it is your first time filing a tax return in Germany, it is a good idea to speak to a tax advisor first. You could even ask a lot of questions, take good notes and then if your situation is the same next year, you’ll be able to file it yourself!
Things to note for your tax return
While it may no longer be required to submit proof of your expenses (ie. receipts), as a freelancer it is advised to keep them for at least 10 years as the tax office (das Finanzamt) can request an audit (eine Betriebsprüfung) at any time.
If you file completely online through ELSTER, you will need a digital signature to sign the forms. You can find a good step by step guide here. Of course, you can submit your returns semi-electronically, meaning you print out the signature pages, sign them manually and then send them in by post.