● Your annual income was less than the allowance● You worked part-time or part-time in Germany● You were not correctly classified for tax payments● You provided financial assistance to your parents or other dependents in your home country● You paid rent in Germany and in your home country● You paid for flights to and from Germany● You have incurred work-related expenses such as travel expenses● You have incurred You are married but taxed as single● You had work-related expenses that were not covered by your employer Expatriates living in Germany may be subject to German taxes, especially if they have a German income. The German tax system is similar to the structures of other Western countries. You pay income tax throughout the year, usually with an employer deducting taxes from each paycheck. Adjustments are then made at the end of the year to account for any insufficient or overpayments. Individual corporations and members of a partnership can deduct a large portion of corporate tax from their personal income tax bill. The withholding tax on earned income is based on personal status tax brackets. The tax brackets differ essentially within the applicable exemption limit. Married couples are faced with the decision to opt for a combination of classes III/V or IV/IV. In the first case, the high-income spouse receives twice the basic allowance, while the second very low-income employee is taxed. In the latter case, both spouses are taxed on the basis of the standard rate of exemption. The choice of tax brackets only counts for withholding tax and therefore for directly available income.

After the assessment of income tax, which takes place a few months after the end of the tax year, the tax refund is not affected by the choice of tax class. In addition, employers are also required to deduct contributions to the social security system at source. For taxable income above € 270,500, a tax of 45% is levied All resident natural beings are taxed on their worldwide income. Non-resident natural persons are taxed (usually by withholding tax) only on German income. Most of the revenue comes from income tax and VAT. The revenue from these taxes is distributed proportionally between the Federal Government and the Länder. The municipalities receive part of the revenue of the Länder. In addition, there is compensation between rich and poor States (Constitution, art.

107). This type of tax applies to capital income such as dividends, interest, mutual fund income and private capital gains such as the sale of shares or investments in corporations. Capital gains tax in Germany is currently flat-rate at 25%. At the federal level, the government receives tax revenues from residents in the form of personal income taxes, property taxes and capital gains. The amount of federal tax payable can be reduced by various deductions and mitigated by various child allowances. Some non-residents are liable in Germany if they have certain types of income there. As a rule, public and private companies are taxable in Germany, with a few exceptions, such as charitable foundations and religious institutions. Products and services manufactured in Germany are subject to value added tax (VAT) in accordance with EU regulations, with a few exceptions. Other types of tax revenue include real estate transfers, inheritance and gift taxes, capital gains, aviation and motor vehicle taxes. Note: These rates apply before deduction of the solidarity tax. If you are employed, you can deduct certain income-related expenses that are documented and have not yet been reimbursed by your employer.

Are you planning to live and work in Germany? Find out how to file your income tax in Germany and how the local tax system works with our expert guide. For the purposes of collecting income tax in Germany, income is divided into seven different types of income. A distinction is made between: ● IV — Married workers – the work/receive income and the wages of both partners are similar – German earned income is usually treated as German income if you provide services while physically residing in Germany. Business tax is levied on business income, while a tax-exempt amount of €24,500 must be taken into account for individuals and partnerships (i.e. . . .