Taxation in another Member State

Information about Rights & Duties of #Other taxes

Information about Rights & Duties

Taxation in another Member State

Income tax abroad

I am an employee

What income is taxable in Germany?

  • Have you been living in Germany for more than six months? A continuous stay of more than six months in duration is grounds for ordinarily resident status in Germany. Ordinary residence or residence in Germany mean that you are liable for taxes in Germany without limitations and that you must pay tax in Germany on your income anywhere in the world.
  • Have you been living in Germany for no more than six months? If you are neither resident nor ordinarily resident in Germany, you only pay taxes in Germany on income you earn there (limited tax liability).
  • Do you have income from other EU countries? Make sure that you are not paying taxes twice on the same income.

How much must you pay?

What is left over from your gross income in Germany after tax deductions?

The taxable income is determined from the total income from all forms of income, taking into consideration various tax allowances and deductions. The standard income tax payable on this income is determined according to the following threshold values:

Range

Taxable income

Marginal tax rate in 2020

1

up to EUR 9 408

0%

2

EUR 9 409 EUR 57 051

14% rising to 42%

3

EUR 57 052 EUR 270 500

42%

4

EUR 270 501 and above

45%

Apart from this, a solidarity surcharge in the amount of 5.5% of your income tax is generally payable.

If you are also a member of a religious community that raises church tax, you pay church tax . Church tax is also calculated based on the income tax and is 8% (in Bavaria and Baden-Württemberg) and 9% (in other Federal States).

When calculating salaries tax, certain deductions are taken into consideration.

When and how do you pay?

Your employer withholds the salaries tax payable from your pay and sends this amount to the inspector of taxes. You can determine your provisional annual salaries tax liability using the Interactive Wages and Income Tax CalculatorOpens in new window of the German Federal Ministry of Finance.

Apart from the taxes payable, employer contributions for statutory social security (pension, care, unemployment and health insurance) are also withheld directly from salary payments.

Is your salary your only source of income? In this case, you generally do not need to submit a tax declaration. However, there are exceptions, such as when you have earned a wage from more than one employer simultaneously.

Would you like to submit a tax declaration to be able to benefit from certain tax allowances? If you wish to do so, send your declaration to the inspector of taxes responsible for you before the end of July of the following year.

Your inspector of taxes will inform you of your rights and obligations. You can get more detailed advice from tax consultants or lawyers, which can also provide you with legal representation in dealings with official agencies and courts.

Objections/complaints

You can file an objection to your tax notice with the inspector of taxes within one month of receipt of notice, and if required, you can file a complaint with the Finance Court against a decision made regarding your objection.

I am independent

What income is taxable in Germany?

  • Have you been living in Germany for more than six months? A continuous stay of more than six months in duration is grounds for ordinarily resident status in Germany. Ordinary residence or residence in Germany mean that you are liable for taxes in Germany without limitations and that you must pay tax in Germany on your income anywhere in the world.
  • Have you been living in Germany for no more than six months? If you are neither resident nor ordinarily resident in Germany, you only pay taxes in Germany on income you earn there (limited tax liability).
  • Do you have income from other EU countries? Make sure that you are not paying taxes twice on the same income.

How much must you pay?

What is left over from your income in Germany after tax deductions?

The taxable income is determined from the total income from all forms of income, taking into consideration various tax allowances and deductions. The standard income tax payable on this income is determined according to the following threshold values:

Range

Taxable income

Marginal tax rate in 2020

1

up to EUR 9 408

0%

2

EUR 9 409 EUR 57 051

14% rising to 42%

3

EUR 57 052 EUR 270 500

42%

4

EUR 270 501 and above

45%

You can determine your provisional annual income tax liability using the Interactive Wages and Income Tax CalculatorOpens in new window of the German Federal Ministry of Finance.

Apart from this, a solidarity surcharge in the amount of 5.5% of your income tax is generally payable.

If you are also a member of a religious community that raises church tax, you pay church tax . Church tax is calculated based on the income tax and is 8% (in Bavaria and Baden-Württemberg) and 9% (in other Federal States).

When and how do you pay?

You may have to make prepayments on your taxes (based on your incomes from the previous year) to balance your anticipated final tax liability, if such prepayments are required by the inspector of taxes.

Have you founded a new business ?

Anyone founding an agricultural, forestry or trading business, or opening business premises must register in the civil parish in which the business or business premises are opened. The civil parish will forward the information to the competent inspector of taxes. Anyone starting freelance work must report this to the competent inspector of taxes immediately.

Apart from notice of commencement of activity described above, the inspector of taxes requires further information about the legal and actual relationships that are of substance for taxation. This information will be requested in the tax recording questionnaire that you must send unsolicited to your inspector of taxes within one month of commencement of the activity.

Based on the information you provide in the questionnaire, the inspector of taxes will determine the level of prepayments you must make against the taxes payable.

For as long as your enterprise exists, you must submit your tax declarations to your competent inspector of taxes by the end of July in the subsequent year.

Your inspector of taxes will inform you of your rights and obligations. You can get more detailed advice from tax consultants or lawyers, which can also provide you with legal representation in dealings with official agencies and courts.

Objections/complaints

You can file an objection to your tax notice with the inspector of taxes within one month of receipt of notice, and if required, you can file a complaint with the Finance Court against a decision made regarding your objection.

Further information

Responsible for the content
Federal Ministry of Finance

Last update or date of publication
18.11.2020