Taxes in Germany
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Save taxes
Tax statistics 2023
Tax Revenue
915.9
Billion Euros
Tax Refund
1095
Euros on average in 2019
Deficit
91.9
Billion Euros
Debt
2.62
Trillion Euros
Freebies
Tax deductible expenses checklist
Summary of all the possible expenses you can deduct from the taxes.
Tax allowances & flat rates checklist
Summary of all the tax allowances and flat rates the German tax system offers.
English Speaking Tax Advisor
A tax advisor can help you
- File income tax return
- Change tax class
- Get a tax residency certificate
- Support in starting a business
- Offer services in English
Tax Software
- 34.95 € for filing a single income tax return
- Easy to file and save tax.
- The tool is also available in English.
- Get tax-saving tips to maximize your tax return in the current and the following years.
- 34.99 € for filing a single income tax return
- Tips on deductible costs & plausibility check
- Try it out for free & only submit if you’re fully satisfied
- Also available in English
- 39.99 € for filing up to 5 income tax returns for a particular tax year.
- Save by filing income tax with your friends.
- Only available in Germany
Tax ID and Tax Number
Tax identification number (Steueridentifikationsnummer in German) is often referred to as Tax ID (Steuer-ID in German). The tax office automatically assigns a Tax ID to everyone who registers themselves in Germany.
Tax number (Steuernummer) is issued by your local tax office (Local Finanzamt). It changes as you change the municipality.
Tax classes and Tax rates
Tax classes
| Tax class | For whom |
| Tax class I | Singles / Divorced /Widowed |
| Tax class II | Single parents |
| Tax class III | High earner in the registered couple |
| Tax class V | Low earner in the registered couple |
| Tax class IV | Married or registered partners (Both earn similar wages) |
Tax rate
| Income (singles) | Income (married) | Marginal Tax rate |
|---|---|---|
| 0 – 11,604 | 0 – 23,208 | 0% |
| 11,605 – 17,005 | 23,210 – 34,010 | 14% – 24% |
| 17,006 – 66,760 | 34,012 – 133,520 | 24% – 42% |
| 66,761 – 277,825 | 133,522 – 555,650 | 42% |
| >277,826 | >555,650 | 45% |
Change tax class
Using the right combination of income tax classes can improve a married or registered civil partner’s unemployment, sickness, maternity, or parental benefits. Learn how to change tax classes in five minutes online.
Is filing a voluntary tax return worth it?
Yes, in most cases, filing a voluntary tax return is worth it in Germany. On average, you can save 1095 € in taxes by submitting a voluntary tax return in Germany.
You can use one of the recommended tax programs for free to check if you have potential tax refunds. If you do, file the income tax return. Otherwise, don’t.
Types of taxes
There are almost 40 different taxes in Germany. Which tax you must pay depends on your profession, assets, and things you buy.
You either pay the tax directly or indirectly to the tax office. The most common indirect tax is VAT. You pay it on every product or service you buy, such as, clothes, software, etc. The service provider or company collects it from you and pays it to the tax office.
Our guide gives you an overview of all the types of taxes in Germany.
Radio tax
Every household in Germany pays a radio tax of 18.36 € per month (as of 2024). The “ARD ZDF contribution service” charges a radio tax per household.
Capital gains tax
Capital gains taxes are paid on the profits from the sale of investments. You pay a flat 25% tax on profits from stocks plus a 5.5% solidarity surcharge.
Car tax
Every car owner in Germany must pay vehicle tax. How much car tax (Kraftfahrzeugsteuer) you must pay depends on your car type, engine capacity, and CO2 emissions.
Double taxation
A double taxation scenario arises when you live in one country and receive income from another. In this case, both countries can levy tax on your income.
This is where the Double Tax Treaty comes into play. It allows you to avoid being taxed twice—once in the country where you live and another where you earn.
Tax on foreign income
Everyone who is a resident of Germany must declare foreign income in their tax declaration in Germany.
You declare foreign income in your tax return as you do domestic income. This means adding the foreign income to the relevant appendices of the tax form as you would for domestic income.
Save taxes
Tax deductible expenses
There are a lot of ways available to save taxes in Germany. These are often separated into personal and professional categories.
Tax allowances & flat rates
The German tax system offers several tax allowances to reduce the tax burden. You can also claim flat rates without proof to save taxes.
Income-related expenses
Almost every employee can deduct around 1516 € in taxes without proof. Moreover, you can deduct all the money you spend to earn the income.
Deduct medical costs
Dental costs
You can deduct supplementary dental insurance costs from your taxes. Additionally, you can deduct the dental treatment costs not covered by the health insurance.
Health insurance costs
In Germany, both private and public health insurance contributions are tax-deductible. However, the deduction is limited to the costs of basic insurance services.
Medical expenses
You can deduct medical expenses from your income tax return. However, they must exceed the reasonable burden and are not covered by your health insurance.
Other tax-deductible costs
Legal costs
You can deduct the cost of work and landlord legal insurance from taxes, as well as the costs of legal disputes.
Home office costs
Even if you don’t have a dedicated home office space, you can still claim a home office flat rate of 1260 € from 2023.
Relocation costs
The relocation expenses are tax deductible if you moved for personal or professional reasons.