Tax Return Germany – Get an average tax refund of about 1,000 EUR!
Last update: 23 March 2023
In this article I will give you a brief introduction to the German tax system and show you how to submit your tax return in Germany. Don’t worry, it’s actually not that difficult to submit your tax return in Germany and it’s definitely worth doing it as you can expect to get back quite a nice amount of money. Just read through the below lines and start your tax return.
Taxes in Germany
The German tax system can be pretty confusing if you have just moved to Germany. I will therefore try to explain it to you in a few sentences… If you are employed in Germany your payroll tax (in German “Lohnsteuer”) will be deducted automatically from your monthly salary. By submitting a tax return (in German “Steuererklärung”) you can reduce your tax burden by lowering your taxable income through expenses. How you do that? I will give you some examples:
You’re commuting to work every day and the distance from your home to work is 20 km. According to the German tax law you have a mileage allowance of 30 cent per km for a single way. Hence if you’re going to work everyday for 220 days this would lower your taxable income by 1,320 EUR (220 days * 20 km * 0.30 EUR). If your personal tax rate is 40% this means you would get a tax return of over 500 EUR. Your personal tax rate depends on your yearly salary (Find out your personal tax rate with this table)
You have bought a computer or a smartphone for your work. Let’s assume the cost for the device was 800 EUR. This means with a personal tax rate of 40% your tax return would be 320 EUR.
You have bought books for your work worth 200 EUR. With a personal tax rate of 40% this means a tax refund 80 EUR.
…and so on! Basically all work-related expenses lower your taxable income.
And the best thing is: Even if you do not have any or only little work-related expenses you get a tax return!
Because there’s something called “Werbungskostenpauschale” (I know… weird word…). This means that the tax authorities accept generally 1,000 EUR as work-related expenses, no matter if they have occurred or not. Again assuming a personal tax rate of 40% this means 400 EUR guaranteed!
Tax return Germany – Is it worth submitting a tax return in Germany?
From the examples above the answer is pretty simple: Definitely yes! By submitting a tax return (or “Steuererklärung”) in Germany you get back on average around 1,000 EUR. Submitting your tax return usually doesn’t take longer than an hour, so this is time well spent (where else would you earn 1,000 EUR an hour???). This is what you need to keep in mind:
Collect your receipts for work-related expenses during the year. Usually you don’t need to hand them in with your tax return but tax authorities (the “Finanzamt”) might want to check them.
You can start submitting your tax return from January 1st on for the previous year. The deadline for submitting your tax return is July 31st. So for the year 202 you can submit your tax return between January 31st 2021 and July 31st 2021.
If you haven’t submitted a tax return in the past, you can submit a tax return retrospectively for the last four years.
How to submit your tax return in Germany
There are basically three ways to submit your tax return in Germany:
1. Use a tax return online platform
This is definitely the easiest way to submit your tax return in Germany, especially if you’re doing a tax return for the first time or if your German skills are still improvable. The tax return online platforms guide you easily through the process and you will get tips on how to get the most out of your tax return. Furthermore there are some platforms available in English to make it even easier for you.
2. Use a tax advisor or the “Lohnsteuerhilfeverein”
Especially if you have a more complex situation (e.g. your self-employed or have income from capital investments) a tax advisor is recommendable. The tax advisor will prepare, process and submit your tax return for you. To find a tax advisor in Germany check out this page.
Another alternative to the tax advisor are so-called “Lohnsteuerhilfevereine” (i.e. income tax assistance associations). These associations help their members to prepare their tax return. Depending on your annual salary you pay a yearly membership fee (e.g. if you earn between 30,001 – 40,000 EUR/year the membership fee is around 120 EUR). This is usually the cheaper option compared to tax advisors. Check out this page to find a Lohnsteuerhilfeverein near to you.
3. Use the official forms from the German tax authorities
The cheapest but also most complicated way to submit your tax return is via the official forms provided by the German tax authorities. Simply create an account on ELSTER, the portal of the German tax authorities and submit your tax return online. Although this is completely free of charge I wouldn’t recommend it as you don’t get any tips on how to save money and it requires quite good knowledge of German. To set up an account go to the ELSTER website.
Summary – Tax return Germany
As you can see, it’s easy and definitely worth submitting a tax return in Germany as you can get on average around 1,000 EUR back. Should you have any questions send us a message.
This is just a general information about how to submit a tax return in Germany. I’m not a professional tax advisor. If you need assistance please get in touch with an official tax advisor.
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