Germany’s cabinet approved the 2026 Annual Tax Act (Jahressteuergesetz 2026) on August 12. The law changes taxes for employees, freelancers, and businesses alike.
What does the Jahressteuergesetz 2026 do?
Germany passes a new Jahressteuergesetz most years. It bundles smaller tax-law changes into one law instead of many separate bills.
The 2026 version focuses on cutting bureaucracy and closing tax loopholes. It also pushes more tax administration onto digital channels.
The Bundeskabinett approved this law on August 12, 2026.
The Bundestag and Bundesrat still need to approve it. Final passage is expected by the end of 2026.
Most provisions take effect on January 1, 2027, unless stated otherwise below.
| Change | Effective date |
|---|---|
| ELSTER becomes your default tax mailbox | January 1, 2027 |
| Tax interest rate doubles to 3.6% | January 1, 2027 |
| “First workplace” period cut to 24 months | 2027 |
| Foreign license fee threshold rises to €100,000 | Payments after December 31, 2026 |
| Research tax credit cap rises to €25 million | 2026 |
| Property price-split by contract | Once the law is in force |
| Rule for foreign major shareholders | Once the law is in force |
#1 Your tax mail moves online by default
Starting January 2027, tax offices will send assessments through ELSTER by default. ELSTER is Germany’s official online tax portal (Elektronische Steuererklärung).
This applies if you have an active ELSTER account. You can still request paper letters if you prefer them.
#2 Interest on tax debt and refunds doubles
The interest rate on tax arrears and refunds will double. It rises from 1.8% to 3.6% per year from January 2027.
This rate applies if you owe back taxes after an audit. It also applies to refunds the tax office owes you.
You can use online services to help you file and save income tax in Germany. We find Wundertax*, SteuerGo*, and WISO Steuer* (German) among the best tax software out there.
If you have a complex tax return or filing it yourself makes you nervous, you should get advice from a tax consultant. Tax consultants are not cheap in Germany. Depending on your situation, they may cost between 600€ and 2000€.
However, a good tax consultant can save you a lot of money.
You can get a free quote from a tax consultant here. The tax advisor offer services in English.
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You can read the detailed comparison of best tax software in Germany here.
#3 Shorter “first workplace” rule for domestic assignments
Your employer can only treat a workplace as temporary for 24 months. A temporary assignment (Auswärtstätigkeit) is a workplace your employer assigns you to for a set, limited period from the start. It is not an open-ended or long-term posting.
The old rule allowed 48 months for assignments inside Germany.
This is called the “first workplace” rule (erste Tätigkeitsstätte). It affects your commuting allowance and travel expense claims.
Assignments outside Germany still keep the 48-month rule. This change takes effect in 2027.
#4 Foreign license fees threshold jumps tenfold
Businesses paying license fees to foreign owners face withholding tax. It is the tax deducted before the payment goes out.
Below a certain threshold, they can use a simplified procedure that skips the standard tax office clearance.
The threshold for that simplified procedure rises tenfold. It increases from €10,000 to €100,000 per year. The change applies to payments made after December 31, 2026.
This matters for German publishers and companies with cross-border licensing deals. It cuts paperwork for many everyday royalty payments.
#5 Research tax credit cap rises to €25 million
Companies doing research and development can claim a Forschungszulage. The maximum credit per company and project rises to €25 million.
This raises Germany’s ceiling closer to EU state-aid limits. It applies from 2026 onward.
#6 Property contracts can set the price split
When you buy a developed property, tax law splits the price. Part counts as land value and part as building value.
Only the building value can be depreciated for tax purposes. The new law lets your purchase contract set this split.
Tax authorities will publish a simplified calculation tool for the split. This gives property investors more certainty at purchase.
#7 Foreign investors and platform income face tighter rules
Foreign investors with a 10% stake or more face a new rule. They must request tax refunds after a transaction instead of an advance certificate.
The goal is to prevent abusive tax planning around stock sales. It also extends income reporting rules to online platforms outside the EU.
This affects platforms in countries with a data-sharing deal with Germany. Such platforms may now report your income to German tax authorities.
Sources
- https://www.bundesfinanzministerium.de/Content/DE/Pressemitteilungen/Finanzpolitik/2026/08/2026-08-12-jahressteuergesetz-2026.html
- https://www.bundesfinanzministerium.de/Content/DE/Gesetzestexte/Gesetze_Gesetzesvorhaben/Abteilungen/Abteilung_IV/21_Legislaturperiode/2026-05-19-JStG2026/0-Gesetz.html
- https://kpmg.com/de/de/themen/2026/05/jstg2026.html
- https://www.pkf-fasselt.de/artikel/referentenentwurf-fuer-ein-jahressteuergesetz-2026
