Available languages:

Last checked : 22/08/2018

Income taxes abroad – Germany

I'm an employee

What income will be taxed in Germany?

  • You have lived in Germany for more than 6 consecutive months? You are considered ‘ordinarily resident' in Germany and, as such, are subject to unlimited tax liability and must pay tax on your worldwide income there.
  • You have lived in Germany for no more than 6 months? You are not considered tax resident, and pay tax only on income earned in Germany (limited tax liability).
  • You receive income from other EU countries? Make sure you are not paying tax twice on the same income.

How much will you pay?

What's left of your gross income in Germany after deduction of taxes?

Taxable income is determined by adding together all your various sources of income and subtracting from that amount any allowances and other deductions. The income tax due on the amount established is then calculated using the following scale:

Bracket

Taxable income

Marginal rate in 2018

1

up to EUR 9 000

0 %

2

EUR 9 001 – EUR 54 949

14 % rising progressively to 42 %

3

EUR 54 950 – EUR 260 532

42 %

4

from EUR 260 533

45 %

There is also a solidarity surcharge, equivalent to 5.5 % of your income tax.

You must also pay church tax if you are affiliated to a religious community that charges it. Church tax is based on your income tax bill – it amounts to 8 % of your income tax in Bavaria and Baden-Württemberg, and 9 % in other parts of Germany.

Various deductions are allowed that may reduce the amount of tax you pay on your salary.

When and how do you pay?

Your employer deducts the income tax due from your wages and pays this to the tax office. You can get an idea of how much tax you will have to pay on your wages from the German Finance Ministry's interactive wage and income tax calculatorde (Interaktiver Lohn- und Einkommenssteuerrechner).

Your employer will also deduct your contributions to statutory social insurance schemes – pension, care, unemployment and healthcare insurance – direct from your wages.

Is your salary your only source of income? If so, you do not normally have to file an annual tax return. However, there are exceptions, e.g. when income tax is deducted simultaneously by multiple employers.

Want to file a return to benefit from specific tax allowances?

Send the return to the relevant tax office within four years of the end of the calendar year.

Your local tax office (Finanzamt) will provide information on your rights and obligations. You can obtain more detailed advice from tax consultants or solicitors, who can also provide legal assistance at tax offices and in court.

How to appeal / complain

You may lodge an appeal against your tax notice at the local tax office within one month, and subsequently, if need be, take your complaint to the tax tribunal.

Web links

German Government – Information on income taxde

I'm self-employed

What income will be taxed in Germany?

  • You have lived in Germany for more than 6 consecutive months? You are considered ‘ordinarily resident' in Germany and, as such, are subject to unlimited tax liability and must pay tax on your worldwide income there.
  • You have lived in Germany for no more than 6 months? You are not considered tax resident, and pay tax only on income earned in Germany (limited tax liability).
  • You receive income from other EU countries? Check information and decisions to make sure you are not paying tax twice on the same income.

How much will you pay?

What's left of your gross income in Germany after deduction of taxes?

Taxable income is determined by adding together all your various sources of income and subtracting from that amount any allowances and other deductions. The income tax due on the amount established is then calculated using the following scale:

Bracket

Taxable income

Marginal rate in 2018

1

up to EUR 9 000

0 %

2

EUR 9 001 – EUR 54 949

14 %

3

EUR 54 950 – EUR 260 532

42 %

4

from EUR 260 533

45 %

You can get an idea of how much tax you will have to pay on your wages from the German Finance Ministry's interactive wage and income tax calculatorde (Interaktiver Lohn- und Einkommenssteuerrechner)

There is also a solidarity surcharge, equivalent to 5.5 % of your income tax.

You must also pay church tax if you are affiliated to a religious community that charges it. Church tax is based on your income tax bill – it amounts to 8 % of your income tax in Bavaria and Baden-Württemberg, and 9 % in other parts of Germany.

When and how do you pay?

If applicable, you must make advance payments (based on your income from the previous year) to offset your expected final tax liability, if these advance payments have been determined by the tax office.

What if you have set up a new company?

If you have set up an agricultural or forestry holding or a permanent establishment, you must register it in the municipality in which the holding or establishment is to be opened. The municipality forwards the information to the competent tax office. You may also register the new company at the tax office yourself. If you begin working as a freelancer, you must inform the tax office immediately. The tax office then sends the questionnaire for tax registration, as soon as it becomes aware that you have started freelance work, via the relevant municipality.

The tax office will determine the amount of tax payable on the basis of that questionnaire.

In any case, you must file a return with the relevant tax office by the end of July of the following year.

Your local tax office (Finanzamt) will provide information on your rights and obligations. You can obtain more detailed advice from tax consultants or solicitors, who can also provide legal assistance at tax offices and in court.

How to appeal / complain

You may lodge an appeal against your tax notice at the local tax office within one month, and subsequently, if need be, take your complaint to the tax tribunal.

Web links

German Government – Information on income taxde

See main information on this topic

Share this page: