Tax return in Germany for foreigners made easy – Steuererklärung
Interactions with the finance authorities is almost always something we want to avoid. However, doing your tax return in Germany can not only be super easy, but also prove to be quite profitable. That’s right: you could probably expect to get a few hundred to a few thousand euros!
If the “how” is the part that worries you the most, let me assure you that Germany has come a long way the past few years. Foreigners have been blessed with many other way to do their tax return in Germany in English too.
So dive in with me into this broad introduction.
Even if it’s not your first year here, the average tax return in Germany is close to 1000€ nation-wide. Now that’s motivation!
The long road to your tax refund in Germany:
Before your panic when thinking “I haven’t done my tax return this year!”, let me assure you that there is good chance you won’t have any problems with your Finanzamt if you forgot to file a tax return. It might not be compulsory.
Should I be doing one?
It is compulsory for self-employed people. For employees, it is only compulsory if they are in one of the following situations:
- Additional income (not from salary) higher than 410€ in total.
- Salary replacement income (like unemployment benefits, Elterngeld or Kurzarbeit Geld) higher than 410€ in total.
- More than one employer in the year.
- More than 2 salaries (like a full-time job and a minijob).
- Married with tax classes 3 and 5, or both 4 “mit Faktor”. More info on tax classes here.
- Divorced and re-married the same year.
However, it’s almost always a good idea to submit a tax declaration in Germany, even you are not in the situations above. There are many ways to deduct expenses to lower your total taxable income, even as a student or when unemployed!
You have already paid your taxes throughout the year, now your job is to obtain as much refund as you can! I show you how in this guide.
How to do my tax return in Germany
Doing it on your own with Elster
From 2022 on, the ministry of finance has made away with paper forms. It’s only possible to submit a tax declaration digitally. That’s where ELSTER comes in.
ELSTER (ELektronische STeuerERklärung) is the name of the free official tool edited by the ministry of finance you will use. With ELSTER you can:
- Find all the forms relevant to your situation (as listed below).
- Input your personal data securely.
- Save drafts at any point.
- Pre-fill some of your information to save time.
- Contact your local tax office directly.
- Receive your final tax assessment faster in digital form.
- Get an answer faster from the tax office.
- Easily have an accountant connect to your data.
- Bonus: Use built-in Chrome translate function to understand what the forms are about. rocessing of your info
This tool is relevant for all tax payer profiles: singles, students, couples, families, employed or freelancing.
This is how you sign-up for Elster:
- Navigate to elster.de and go to “Konto erstellen“.
- The most common option for foreigners is to receive a “certificate data” to start the account. Think of it as a key to prove your identity.
- Pick “Zertifikatsdatei” as an option & “Auswählen“
- Pick “Für mich“.
- Pick “Mit steuerlicher Identifikationsnummer“
- Enter your name, email & your tax ID, (not your Steuernummer, your tax iD. Read this guide about tax IDs for more details). Enter your user name, pick your security question and the answer to that question.
- Tick the terms and conditions box & click “Weiter“.
- A single use password will be sent by post to you within 10 days. With this, you will be able to download your certificate data on your computer & pick a permanent password.
- Every time you want to login on Elster, you’ll need to upload your data as well as using your user details.
Here are the most commons forms for tax return in Germany
If you are an employee , you need the following forms (e.g for 2022) :
- ESt 1A 2022 or (The main form that details general info like your address, iD nummer,etc)
- Anlage N 2022 (The form to detail your income as an employee)
- Anlage Vorsorgeaufwand 2022 (The form to detail your insurances)
If you are self-employed, you need the following forms (e.g for 2022) :
- Est 1A 2022
- Anlage S 2022 (Freelancers only)
- Anlage G 2022 (Gewerbetreibende only)
- Anlage USt 2022 (if you pay V.A.T)
- Anlage GeSt 1A 2022 (Gewerbetreibende only)
- Anlage EÜR
Other common forms include:
- Anlage Sonderausgaben: to document special expenses you want to put off in taxes. This would include pension contributions, education costs, donations and a lot more.
- Anlage Außergewöhnliche Belastung: to document “extraordinary” expenses in case of traumatic events, health issues or handicap.
- Anlage Haushaltsnahe Aufwendungen: to document home related services expenses such as your cleaning professional or renovations.
- Anlage Kind: to document expenses related to your children.
- Anlage Unterhalt: to document financial support provided to other members of your household (eg: spouse, relatives with no income).
- Anlage V: to document rental income.
- Anlage AUS: to document income from outside Germany (except salary)
- Anlage N-AUS: to document salary income from outside Germany.
- Anlage AV: to document a Riester-supported pension scheme.
- Anlage VL: if you received or want to receive vermögenswirksame Leistungen.
- Anlage SO: in case you sold property that is not your primary residence, less than 10 years after purchase or pay alimony.
- Anlage KAP: to document income from financial assets.
- Anlage R: in case you are a retiree and want to submit a tax return in Germany.
- Anlage L: to document income from farming or forestry.
- Anlage U: to document alimony paid to ex-partners or spouses.
- Form “Einwilligung zur elektronischen Bekanntgabe“: this is where you specificy you want to receive your tax assessment in digital form only.
How to fill in Elster forms
Honestly from there, i will gladly direct you to one of the best guides made in English around by our good friends of ToyTown Germany. It’s a bit outdated, but it still gives a good overview. It is very neat, clear and complete to do your tax return in Germany in English properly. I don’t see how i could give better information on how to fill in all those forms.
I need help filling in my tax declaration in Germany, how does it work?
If you are not so good with numbers or a bit scared of doing mistakes because of the German language, there are other ways to do your tax return in Germany.
Good value for the money: self-help online platforms
If this is too much to do, there are also online tools that make it super easy to get your tax declaration in Germany right for a maximum return. New platforms have appeared the past few years to help expats do their taxes 100% in English. They offer the following:
- You can do your tax return in Germany in English.
- Your hand is really guided step-by-step with the tool in a clean interface.
- Check in real time how high your return will be.
- Save progress at any time when you register for a free account, only pay when you submit.
- Submit everything to the Finanzamt online directly.
- Call a English-speaking hotline if you have questions.
In that space, i would recommend the following 3 providers:
TaxFix (39,90€ per submission) or Wundertax (34,90€ per submission): Pick this if your situation is relatively simple: employee or student, no income from abroad, no income from rental, etc. The interface is particularly clean and aimed at high processing speed but they don’t support all profiles yet.
SteuerGo (30€ per submission): Pick this if your situation is a little more complex: self-employed, married with kids, income abroad, pensions, income from property etc. For self-employed people, it also lets you do additional forms like (Einnahmenüberschussrechnung (EÜR), Umsatz- und Gewerbesteuererklärung). Interface is a little noisier but it supports almost all profiles.
SteuerGo does not support one case: if you have had a foreign employer that year. In this case, you can turn to platforms like SmartSteuer which also supports that (No English though).
Worth it if you have a more complex situation: a Steuerberater
You can also turn to professional tax advisers in Germany for this. A Steuerberater is a trained agent capable of preparing, processing and submitting your tax declaration in Germany. They are accountants usually experienced into finding particular rules that is relevant to your tax profile to optimize your return. Even if their fees are controlled by certain laws, you usually have to pay a few hundred euros for their services. This is why it’s only relevant if your situation is a bit more complex like earning relatively well, being married, having kids, owning a house and having different sources of income. It’s also quite normal for freelancers and self-employed persons to have one.
Full guide on how to find a good English-speaking Steuerberater (in Berlin or anywhere else in Germany).
I am ready to submit my tax return, what now?
If you have decided to go with paper, send all forms together to your Finanzamt, without forgetting to sign them. If you have signed-up with ELSTER already, it’s all a matter of a click. With self-help platforms, you will need to pay a fee in order to submit it to the Finanzamt.
After this is done, you will probably wait for 1 or 2 months before you get any answer. You will receive what is called a “Steuerbescheid“, which contains the final assessment made about you from the Finanzamt. Hopefully, a little ka-ching will appear on your bank account some weeks after that. You can now afford this awesome ebike you spotted, or else, paying for your next trip back home.
Alternatively, the Finanzamt might ask you to provide proof for certain things you stated in the forms, or provide additional documents. In this case, expect even more processing times. Make sure to submit a response in time! Here again, if you need more time to gather those documents, you can simply ask for a little more time.
Freelancers – Make your life easier by using a book keeping software
All bookkeeping software sold in Germany use the same standards than the tax advisors do. This means that you can easily let somebody access your data and do the hard work for you. No need to go over each details, saving you and your Steuerberater a lot of time. And this is not even talking about all the time and stress it can save you in the day-to-day business. I have reduced my time spent on bookkeeping by 80%.
You can find recommendations for book keeping software here.
The impact of the Corona crisis on your tax return in Germany
You need to account for support your received
Living in Germany has been a blessing during Corona times. The country has had a healthy budget in order to support freelancers, companies & employees with support packages. Many of us have received support with public money in one way or another.
The money you have received from the German authorities need to be accounted for in the tax return made for 2020 and 2021. This could come under different forms. Some examples:
- Kurzarbeit Geld: if your employer reduced your hours, the German state has compensated for your lost income in the form of Kurzarbeit Geld.
- Corona grants/aid/support money for freelancers: This has taken different names like Corona Zuschuss, Überbrückungshilfe, Neustarthilfe or Härtefallhilfe. In some cases, the application had to be done by your Steuerberater, so they would know where/how to include it for you. For this you use the new “Corona Hilfen” form. Those aids are also to be accounted in your general profit statement (EÜR/Gewinnermittlung).
- Compensation due to legal restrictions: you could not work because of restrictions measure (Infektionsschutzgesetz Entschädigung)
- Krankengeld: if you were infected by the Corona virus and weren’t able to work because of it. You probably have received support money in this case too.
Basically anytime you received public money, it should appear in your tax declaration for that time window.
There is a chance you need to pay some of it back
You know how it all went. The times were uncertain, some measures had to be applied very fast. In some cases, German authorities have applied the rule: “Pay now, ask questions later”. This had the result to pay more to some that didn’t need after all. In this case, the Finanzamt might take this into account and ask some of it back.
For Kurzarbeit 50 for example; those who have worked partially within a month and only received short-time allowance for the lost part. In that case, the employer only withheld wage tax from half the salary.
Doing your tax return after leaving Germany for good
For a lot of us, our love affair with Germany might not last forever. In this case, there are plenty of items to take care of on your way out of the country. One of them is not to forget to do a tax declaration the year after you leave the country. Example:
I left Germany for Denmark in 2021. In 2022, I can still submit a tax return to the Finanzamt from Denmark, as a Danish resident.
Even if you aren’t a German resident by the time your submit your forms, you can still get money back. The process doesn’t change all that much. You just need to pay attention to these points:
- Use Elster or one of the providers listed above to send your documents to your Finanzamt digitally.
- Indicate your current/new address in your new country in the forms.
- Communicate your new bank account details:
- IBAN / BIC/SWIFT
- Bank name & address
- Bank account holder name
I personally checked with my tax consultant as well as with the Finanzamt: they have a internal process/protocol to handle tax returns for people located abroad, so there should not be any issues and everybody gets their money eventually. However, they do recommend to keep a German bank account to reduce potential costs and speed up the process.
Tax return Germany – FAQ
In theory, the deadline is to the 31st of July of the following year (for people that obligated by law to submit one). However, you can ask for an extension if you are short on time. Using a Steuerberater allows you to have even more time, as they have until February of the year after to do it (eg: a submission in Jul 2024 for the year 2023). Be aware that there is a penalty of 25€ per late month.
Important note: employees whose sole income are their salaries are not required by law to submit a tax return. This means that the deadline moves to 4 years in the future. For example, you can do your tax return in Germany for the year 2020 until the last day of 2024. Even more importantly:
As an employee, you can claim a tax return for up to 4 years prior the current year. Pretty handy if you forgot to do it those years to maximize return.
If you feel like you are running out of time, you can let your Finanzamt know before the 31st of July you need more time. They usually give you an extra 2 or 3 months to do your tax return in Germany. If you are working with a Steuerberater directly, they can even do until the year after!
If, like me, you love to play the optimization game, you are surely interested to know which expenses can be put off in taxes. I have made an overview of possible tax deductibles for Germany on this post, for employees, freelancers and students. Self-help platforms usually support most of them and help you make use of them.
It takes between 8-12 weeks for the Finanzamt to process your files and obtain your tax refund in Germany on your account. It’s usually quicker when sending everything out electronically. A poll made by a tax payer’s association uncovered the following waiting times to hear from the Finanzamt:
18 % have to wait about 6 weeks
32 % 6 to 12 weeks
32 % up to half a year
18 % longer than half a year
If you think the Finanzamt made a mistake to process your case, it is possible to protest and open a case (Einspruch) to explain your situation, within one month after receiving the Steuerbescheid.
When this happens, your wage is being taxed at the maximum rate possible. It is possible to get the difference between that rate and the normal rate back when doing your tax return the following year.
If it’s your first year in Germany, it’s very well possible that you don’t have a Steuernummer yet (although you should have a Steuer ID already. Yes, they are not the same confusingly enough. More on that here.) In this case, just leave this field empty, and the Finanzamt will assign you a Steuernummer after your tax declaration.
It used to be the case that the Finanzamt would request the tax payer to prove any and all expense stated in the tax declaration. As you can imagine, that was just lot of paper to process. These days, the Finanzamt will request proof on a case by case basis only, in case they have a doubt or if the amount is rather large.
Beware however that you should still be able to prove those expenses even after the tax return has been processed. It is recommended to keep all relevant receipts for 10 years, especially for freelancers.
The Finanzamt requires of all German residents to declare any and all income sources, even if they are coming from abroad and have nothing to do with your life here. If that income was already taxed from that country, you might avoid double-taxation if it has agreed to a tax treaty with Germany. If so, you can do that by filling the Anlage AUS – Ausländische Einkünfte for your declaration. More info about that here.
Absolutely, you can do a tax return in Germany for the year you left the country. The Finanzamt will transfer you the money in your foreign account if you give them all the necessary information, and a specific request to do so. You will very likely support the costs of the transfer on your own.
I hope this overview helped you to get started on your tax return in Germany. Feel free to ask questions in the comments. All comments are read. Answers in the comments do no constitute professional advice and should not be treated as such. When comments can’t be answered, i usually recommend other solutions or resources. 🙂