Make use of all those tax deductions Germany has to offer
If you are reading those lines, you probably preparing your tax return (full guide here on tax return in Germany in English) or starting as a freelancer in Germany. It’s really like a game, isn’ it? Just how much can i optimize my profile as a tax-payer and maximize my tax deductions in Germany?
While you might need the assistance of a tax advisor with custom advice for your situation, this post aims at giving an broad overview on what tax deductibles Germany can offer. Here it goes, due to popular demand.
Before we start: documenting those expenses for your tax return properly
Where
All expenses that qualify as tax deductions in Germany will need to be properly documented via the different forms made available by the tax authorities:
- Anlage Sonderausgaben.
- Anlage Außergewöhnliche Belastung.
- Anlage Haushaltsnahe Aufwendungen.
- Anlage N (for employees).
- Anlage S (freelancers only)
- Anlage G (Gewerbetreibende only)
- Anlage Kind
How
I can easily recommend the different how-to guides from Finanztip to fill them in. They are all up to date and written in easy German.
If you want an easy to use, English-speaking tool to help you with that, you can turn to platforms like SteuerGo. Use a nice interface to guide you through the maximum possible optimization/return you can get, make use of all possible tax deductions in Germany. It’s an affordable option that everybody can use and simply removes any complexity.
If your situation is really complex and you need more advice, finding a tax advisor is also an option. If you are freelancer, that can achieved easily on demand via the bookkeeping software Sorted. There are more alternatives for freelancers and everybody else on this page.
Tax deductions Germany: expenses related to work life
Expenses that might occur to preserve, pursue or gain work are eligible to deduction, as income tax law states in Germany.
All professional expenses are part of income-related costs and can be deducted from taxes. The following categories apply for both employees and freelancers, unless stated otherwise.
The employee Pauschbetrag
Tax authorities will automatically deduct a lump sum of 1230€ from your yearly taxable income, with no proof to submit to take advantage from it. This is called the Arbeitnehmer-Pauschbetrag. This is basically the Finanzamt recognizing that there are some expenses dedicated to keeping a job, even if the tax-payer doesn’t advantage of other tax deductions Germany can offer.
Naturally, if your expenses total more than 1230€, you have every right too include them as well. Anything above this number will require to be, in case the Finanzamt wants to see some proof.
As you guessed, this does not apply to freelancers.
Expenses related to job search and applications:
Searching and applying for jobs is quite time consuming. Those CVs and cover letters aren’t going to write themselves. You can deduct 2,50€ per application submitted digitally, and up to 15€ per application submitted by post, depending on your Finanzamt. Only valid for employees.
If you need to travel to attend an interview, all costs incurred there qualify as tax deductible in Germany too, as explained further on.
Work related tools & literature
Starting a new job often mean investing in some pieces of equipment, books or clothing:
- hard hat, gloves, apron, work shoes.
- bags, briefcases.
- laptop, smartphone, tablet, gps, headphones.
- software.
- office chair, ergonomic mouse, keyboard, lamp.
- training or technical literature
- any item that might be house primarily for work, it can be creative.
A lump sum of 110€ is also granted here but you can deduct a lot more. If a single item costs less than 487,90€, it can be put off over a single year. Past that threshold, you will need to depreciate the expense overall year (eg: 3 years for a printer).
Commute, business trips, home office & food allowance
A tax deduction Germany is very generous for is anything related to transportation to work and other places to conduct business. The rule is to be able to get 0,38€/km between your home and your work address, regardless of your mean of transportation (one way). This can amount to 4500€ as part of the lump sum for this type of expense. Beyond that, you will need to keep record of each and any expense in the form of receipts.
If you are left to work away from home for a longer time, you can receive a daily allowance from your employer to cover food expenses. If that is not the case, you can claim back 12€ for periods of less than 8 hours away from your normal work place, and 28€ for each 24 hour trip.
This number goes up when travelling abroad, you can check this table for detailed information depending on the country.
It’s a sign of the times: home office is becoming more of the norm. This is why a new tax rebate is now available at a rate 1260€ per year.
Secondary residence taken for work
When starting a new job, you might need to rent another place in order to take on the job. That situation is usually temporary, to give you some time to move your main residence closer.
Costs incurred here can also be deducted on some conditions. It must for example be at least half as close as your main residence, be used for work reasons only, and you should not make this new flat your new permanent living space. In case you qualify, deductions are pretty generous:
- Rent & any other Nebenkosten
- Utilities
- Radio/TV tax costs.
- Parking spot
- Renovation, gardening & cleaning services
- Tax on secondary residence (if applicable)
Contributions to trade unions, business networks & professional insurances
Depending on your field and your professional lifestyle, you might chose to join a trade union or some other professional organisation. It might even be required by law to be able to work in your industry.
Those yearly expenses can also be put off in taxes, as donations can be too.
You can also deduct any expenses related to professional insurances. These would typically be a professional liability, an accident insurance or insurances meant to cover legal costs.
Tax deductions Germany freelancers
All the categories mentioned above is also relevant for freelancers, unless stated otherwise. Freelancers have naturally a lot more possibilities to reduce their taxable income. Any incoming invoices related to services and goods purchased for their business count as deductible expenses. I have mentioned a few more below as a reminder.
Health insurance contributions
Health insurance in Germany is costly, and as a freelancer, it may make quite a big dent in your budget. Thankfully, your Krankenkasse costs are deductible as expenses.
Coworking spaces, workshops & home office
Coworking spaces have very much become the norm these days for digital workers. Keep those bills as they are deductible expenses in Germany. Same applies for a workshop/atelier/fablabs you might rent when working on physical products.
A room at home can also considered a professional expense, as stated above. However, the room must be physically separate from the rest of your home by a door & walls. The room must be arranged as an office and cannot contain other unrelated furniture (like a bed for example). Separating your desk from the rest of your living room with a curtain would not work for example. If this workspace at home is the central place of your occupation, you can put off rental costs pro-rata of the size of the space, with no upper limit.
Work equipment
As a self-employed person, you can deduct a number of things from your taxes, from office equipment to tools and utensils to post-it notes. Here, too, a restriction: it must be used 90% of the time for professional purpose.
This include:
- Office equipment (table, chair, shelf)
- Mobile phone & computers
- Printers, keyboards or other peripherals.
- Software & technical literature
- workwear,
- briefcase
Since 2021, all those costs don’t need to be depreciated over several years. It can be accounted within the same year.
Licenses & paid software
If like me you are using a book keeping software like Debitoor, Sorted, Lexware or Fastbill (highly recommend it), those costs are definitely deductible in Germany. But it does not stop there, you might need to renew your Adobe, Sketch, Traktor or Cubase license too. Any time you pay a software to support your business, it counts as a tax deductible in Germany too.
Tax advisors
If you use a Steuerberater, they will be quick to assign their own fees for a write off.
Hosting & web representation costs
As a freelancer, there is a good chance you have an online presence as well. You are using a hosting provider for this, and you might even have hired a dev to set you up, or bought WordPress themes/plugins. Everything counts as representation costs and can be put off in taxes.
IHK contributions
If you have a Gewerbe, then you are obligated to pay fee to your local IHK (Industrie- und Handelskammer), don’t forget to deduct this expense as well.
Training or education in your field
You can deduct the costs of training (up to about 4,000 euros/year) – but only as long as the Finanzamt sees a recognizable connection to your activity. This applies for courses IRL, online, seminar & classes.
Tax deductibles Germany: expenses related to private life
Relocation expenses
In case you have changed your main residence address in order to be able to start a new job somewhere, you can also put expenses off in taxes:
- Moving company services.
- Estate agent services.
- Additional rent you may have payed while moving.
You can also make use of lump sums as well, for any other moving related expenses. Single people and registered partners can deduct 820€ and 1639€ respectively, without the need to prove anything. Each additional household member: 361€. This is almost ways used by expats for their first year in Germany, as they all moved there.
Cleaning, gardening and private care services
We are leading busy lives and need help at home too sometimes. You can deduct up to 4000€ in services related to the home when hiring a cleaning professional, a gardener or nurses. Even a dog grooming service at home is eligible. As always, make sure to keep all receipts and invoices, in case the Finanzamt asks for them.
Some “Nebenkosten” expenses that you pay through your rent can also qualify here too, if your landlord hires companies for those tasks.
Funeral costs
All events of a tax-payer’s life is taken into account, also when it’s the end of it. Costs included in a funeral such as a gravesite, transportation, preservation casket, cremation, burial can be subject to tax deductions in Germany. This is only applicable if the person that passed away doesn’t leave enough money behind to cover all costs, in form of inheritance.
For expats, it might be wise to sign up for a life insurance that cover those costs though, especially if the body should be transported back home.
Home office
If you have enough rooms at home to be able to use one exclusively as an office, you can take the square footage of that room and deduct rent corresponding to that space. Be aware that this must be a closed room. You can deduct up to 1250€ off in taxes thanks to that scheme.
Pension plans
It’s usually a good idea to top up your public statutory pension scheme with a private one. You would not be going very far without. Just a friendly advice, but i’m sure you have heard this before. Private pensions plan contributions can now be deducted too. You deduct 84% of those contributions (private + public plans), limited to 26 528€ per year.
In case your company is also offering a corporate pension plan, a further 1 800€ can be deductible.
Childcare costs
Having represent a financial burden. That is especially true for expats who don’t have grandparents at hand to get a weekend or evening free once in a while. In this case, we turn to babysitters and kinder gardens. 2/3 of childcare costs can be tax deductible in Germany, for children up to 14 years old. If your children is considered disabled, there is no age limit.
Construction and renovation works around the home
Working around the home is inevitable to keep it from falling apart with time. Now and then, some maintenance or renovation work is due. If you bare those costs, up to 6000€ can be deducted. Note that you don’t need to do those works yourselves. You can also hire companies to do the work for you.
Training, personal development & education
Many of us expats will take a language class to improve on their German. You might also decide change careers or do some training to boost your chances to get a job. Should that be management, coding or graphic design. All those costs are deductible.
Church tax:
If you are for some reason paying Church tax in Germany, you can deduct it from taxes.
Tax deductions Germany students:
Even if you are still a student, you can still do a tax declaration and get some money back in your tax return. The categories below only apply to students, but the categories mentioned above can apply too, if you have been working next your studies.
University, school, college tuition fees
Even though tuition fees are relatively low in Germany, it can amount to a few hundreds or thousands of euros per year.
Those costs are considered tax deductible in Germany, limited to a maximum of 6000€ per year, when this is your first degree/undergraduate degree.
Additional classes & tests fees
You main curriculum may not be the only studies occurring costs. Tests and other private classes, like language courses can be deductible too.
This is often the case for foreign students who had to take language classes and a language test in order to get into university.
Academic literature and other learning material
Depending on your studies, you will probably need to buy some books or other technical learning material throughout. It doesn’t matter if they were in digital or physical form, you can deduct those costs too.
Stationery
Sure, you may be using your computer a lot more than paper nowadays. So computer science students won’t care, but art students will. Keep the receipts for those items:
- Pens
- Papers
- Notebooks
- Binder
- Printer ink cartridge
- Costs for copying documents
- Paint, brushes
- & more, you get the idea. Whatever you need for learning 🙂
Computer & other electronics
Going to university often means investing in a new laptop, sometimes a second screen and a printer too. For good measure, throw in a mouse and a keyboard too for a nice work station at home.
Art students might need a Wacom tablet too at some point.
Those costs also qualify as tax deductible in Germany. However, since those devices are almost always used for private purposes too, a 50% rule applies there.
Commuting & research trips
Not everybody will get a dorm on campus. For this reason, you can deduct commuting costs at a rate of 0,30€ per kilometer between home and your place of study (one way only).
In case you need to travel far away or for multiple days for research purpose for example, some of the food, accommodation expenses are deductible as well.
FAQ
Do i need to send proof for each expense to the Finanzamt when doing a tax return in Germany?
Crazily enough, it use to be the case. Now, the Finanzamt will only request proof on a case by case basis. So you still need to able to produce a document that makes sense with what was in your tax declaration.
How long do i need to keep invoices, bills in case the Finanzamt asks me for some?
Self-employed people must keep all incoming and outgoing bills for a period of 6 to 10 years, depending on the nature of the service/expense.
There is no legal requirement set for private individuals by tax authorities in Germany. Common sense would dictate to keep those documents until you have received their tax return statement (Steuerbescheid) at least.
I hope this overview helped you maximize your tax deductions in Germany. Feel to leave tips, questions and other comments in the comments section how to lower German income tax rate.
Can you clarify the conditions to deduct language courses under the section titled “Training, personal development & education”, please?
The way it is written, it sounds like there’s no conditions but according to this WunderTax article (https://germantaxes.de/tax-tips/deduct-further-education/), it must be related to the job.
I’m currently working in Germany but am not required to speak German at all and my employer does not provide or sponsor German classes. Nevertheless, I would still like to learn German on my personal time to improve my career prospects so it would be great if these expenses are tax deductible since they can be huge.
Hey Elbert. That’s an excellent question. As you can tell from that post, those expenses are usually deducted but some of it is up to interpretation of the Finanzamt if they bother to check those expenses at all. If they ever raise question, you can simply say that knowing German improves your career prospects in any case. Knowing German let you access the whole of the local job market, and not just English-speaking jobs. That statement alone is probably enough. If not, then you only get a partial deduction, which is still worth it. I hope that answers your question?
Hey Bastien,
You raise some good points. I will try it. Thanks for answering my question!
By the way, is there a way to be notified when someone posts or reply a comment on this article? I don’t think I received an email notification.
Hey Elbert. Thanks. I will look into it.
Hi!
Great set of info in here!
If possible, could you answer me something?
I started a job here in Berlin in mid-May, after moving to the country from Portugal.
By the end of the year, I will have paid about 10k in rent for my apartment with all expenses included. Can I have any deductions from this value?
Also, my company offers an additional private pension for which I add 1% of my gross salary per month, could this also be deducted?
Thanks,
Keep up the good work, this page is a must-read
Hey Sousa. Only relocation expenses and some of the “Nebenkosten” included in your rent are tax-deductible as pointed out here. It is possible to deduct some of the savings for pension as listed here. Hope this helps!
Post is very interesting and detailed. Things concerning Germany there is a company that offers everything in regards to tax optimisation and financial planning. Have you heard of Richmond Blackwood?
Hey Alex. thanks. Never heard of them.
Hi Bastien
thank you very much for your post.
I have a very “stupid” question.
If I am a student, but I am unemployed, is there a way that I can still deduct the expenses, even if not fully?
Hey Margherita. Yes, a tax return during your studies makes sense even without income. Because you can claim your expenses during your studies as a loss “carry-forward”. Losses from student days are taken into account as soon as you pay taxes for the first time.
Hi,
Thanks for the brief explanation. It was complete and helpful. I have a question regarding the tax return. I’m wondering if it’s possible to buy a laptop and a tablet in the same year and tax return them at the end of the financial year (Not the full price, but only partially). I mean from the Tax office perspective both digital hardware look the same. It means you can’t have both in the same year. I don’t know if this is right or not. I read it on a random website. I appreciate any help here to clear out the confusion.
Hey Mohammad. They don’t care about the type of device you purchase: they will only look at when you bought them and how they were.
Hi Basten, great site, once I’ve left Germany in the middle of a tax year, I think foreign income to year end is subject to progressionsvorbehalt, ie increases my previous German income tax rate, but will future foreign income be taxed in Germany if some of it is tax free abroad? (Just for that tax year). Keep up the good work!
Hi Bastien, thank you for the wonderful overview.
Representative clothes are work clothes in some occupations (such as in the arts and design). As I understand Finanzamt does not see it that way. So I have a question, let’s say I have a meeting that requires me to dress up representatively, or maybe I need to get a self portrait to be used in applications, and press. Can clothes, haircuts, accessories be deducted in any way?
Hey D. Glad the guide could help. This detailed post on the matter states that for models, since a clear distinction between private and professional use is not possible, the Finanzamt will not accept it. This post also says that.
Hey Bastien,
Thanks so much for the post – helps me a lot!
Still one small question from my side. Can I deduct co-working space as an employee of the company? I’ve seen that the home office is deductible but haven’t found for co-working(still it is explicitly written in the post for freelancers)
Would love to hear your thoughts. Thanks for easing my life as a newcomer with your blog posts. Appreciate it
Hello Viet. You might want to ask a professional for confirmation but I would say that it would have to be treated as a home office situation. As an employee, you can put those expenses off if your employer cannot/will not provide office space to you. Then, the maximum expense would 1250€/year.
Hi Bastien,
Many thanks for the detailed explanation. Are medical bills while being an international student and later being a full-time employee (Hausartzt, Dentist, blood testing, etc) reimbursable?
Thanks in advance.
Hey Alan. Yes, to a certain extent, if you had to pay something that was not covered for legitimate/required medical acts. More info here.
Hello! Really like the website. I was wondering if I can deduct taxes from university and apartment cost although my parent paid for both. (Right now I finished university and I’m employed 40h/ week)
Hey Patricia. Thanks. No, but if your parents are German residents, they can.
Hi Bastien,
I filed for tax refund for 2020 and I was sent a letter by the tax office to provide proof of expenses. I don’t have some some receipts because I paid by cash/ misplaced them. What do I do in this case? should I send only the receipts/ bank statements I have? If I dont send the proof of payment what happens?
Hey there. You should send everything you can possibly use to prove those expenses. In case you don’t have proof, the Finanzamt will probably reject those items and they will take it into account. They might also ask you to send a corrected tax declaration. There should not be any further consequences (fine or other) when the items in question are small.
I have heard people say that you need to purchase things with a German bank account in order for expenses to qualify as deductible for your German freelancing. Is this true?
I have looked everywhere for this information, and I can’t find it.
The scenario is I often use a US credit card (I’m registered with a German address) to purchase electronic items because it offers extra insurance and points. Normally, I would then reimburse myself to pay the credit card bill with my business bank account. I know Germans don’t do this, but it makes sense to me. Is this problematic behavior if I’m audited?
Hey Jeff. I have not heard of something like this before and could not find information about this with a research now. However, I can imagine that in case you are probed by the Finanzamt, it would be much easier to prove/justify expenses if bank movements are located in Germany. The documentation & format would be in German, much easier for a German clerk to go over. Legality aside, it seems to be a best practice. Why not using a German credit card?
Hi! Thanks for this post!
I have two questions that I could not find the answer to online. If I have more deductions to do than the actual amount of taxes I paid this year, a tax credit – it basically rolls over to the next year, or could I ask for those amounts regardless, or does the finanzamt charge less taxes next year?
and the other is, if I was a student but obtained a full time job now, can I deduct some expenses as student, like a laptop, and then a some related to my work? Again, many thanks!
Hey Andy. In this case, you would get a tax refund for that year for private income tax. I think you answered your own question otherwise: if you were not a student at time of purchase, you can make use of the special deductions applicable to students.
Hi! Thanks for the reply! just as a follow up, I didn’t get the phrase about private income tax but I think basically that if I have a larger amount of tax credit but no tax payed I would just roll over that credit or refund for another years.
Hello Bastien,
Thank you for all of your work doing this website.
I am wondering if I could deduct 50% off a new laptop and how could I be able to do so? Further, could I buy the laptop in monthly payments and still have a 50% deduction? I am an artist-researcher with an M.A waiting to be confirmed as a PhD student in a university in Berlin and am also taking an extra-curricular program in a higher education institute at the moment. I have participated in lectures, art institutions researching AI and work as a freelancer as well in music production. My M.A was also taken in Berlin and I have been living here for the past 6 years.
Thank you very much for your time and consideration. I really appreciate it.
Best regards
Hey Guilherme. You’d have to check if you want to have this laptop be a cost as a student, or a cost as a freelancer. As a student, you can make use of the “Sonderausgaben” category, which lets you put off a maximum of 6000€ of costs. Indeed in this case, the 50% rule would apply. As a freelancer, it would look a bit different because it would be treated as a business asset, to be depreciated over 3 years-time. Hope this helps.
Hey,
Can a parent deduct the university fee for their child if the receipt is on the child’s name?
Hey Richard. It’s apparently not possible (source). But your child will be able to do it when he starts working for the years he was in university, if he starts working right after his/her studies.
Very useful, thank you!
Welcome.
Hi, I rent an apartment in Berlin (annually), but I do not live or work in Germany. I make a declaration of my rental income every year (Anlage V). Are there any expenses I can claim that I might not be aware of? Thanks.
Hey Peter. Some costs can be put off in taxes like the Grundsteuer, when you rent the place out. More details on this page. It often depends on whether or not you live in the place or not.
Hey Bastien,
Thank you for the information,
I moved to Germany in 2018 for my master’s studies, I have not filed tax returns till now.
I had purchased a laptop in my home country a couple of months before arriving here. the laptop is for my education so can I show it as an expense (50%)?
I did not work in 2018, worked part-time for a couple of months in 2019.
I also did my compulsory internship and thesis in a company in 2020 (paid internship and thesis). I have finished my studies and started working now. So, Can I include educational expenses from previous years while filing tax returns next year?
Can I include the compulsory health insurance costs and living costs(rent, food, phone) during my master’s studies for a tax rebate?
I do not have any receipts for the printouts, notebooks, and other stationery I have taken during every semester. So, can I include around 50Euros per semester for these expenses? (Without any proof). I moved to a different part of Germany in the fall of 2019 to complete my internship and thesis, Can I include that as a relocation expense? (Again without any proof). Is traveling to home country every year tax-deductible?
Thank you in advance.
Hey Shan. I can give pointers and advice but I don’t replace a consultant. You will need to seek professional help for a personalized assessment.
Hey Bastien,
Please give me some pointers so I will have some idea when I go to a consultant or use online tax software.
No. You are looking for fairly complete assessment/consultation. I’m not qualified for that.
Thank you for this nice explanation! I moved to Germany to work as software engineer, during the first two months I was paying taxes before actually relocating to Germany ( I was working remotly) what can I deduct from those two months? like health insurance maybe ?
Hey Ayman. It depends. Can’t tell you. Better talk to a specialist.
At the end of the year you will receive your lohnsteuerjahresbescheinigung.In this document health insurance cost will be listed and will be deducted when you file the declaration. As an expat the higher level refunds would be the case if you have doppelte Haushaltsführung (double rent payments) and if you send parent or grandparents more than 65 years old in need money to support them.
Hi Bastien,
Thank you for this post, it’s really helpful!
I have two questions that hope to get your advice on:
1, I was insured by a private expat health insurance (59 EUR per month) in 2019, could this expense be tax deductible for a freelancer?
2, I only worked as an employee for 2 months in 2019, could I include my German student expenses in 2016-2018 as part of the tax deductions for 2019? Or should I do it for tax deductions 2020 when I completed the whole year of employement?
Thank you in advance!
Hey there. 1. Health insurance contributions can be considered deductible. 2. How many months you work during a given year does not impact your ability to submit a tax return.
Thank you for your reply, Bastien!
Is there a limit cap on how much per year could you deduct the health insurance?
Hey Weihua. There is no limit per say. It will be considered like a business expense.
You should know that the first 11000 euros earned are tax free.
It is called existenzminimum. In that case you would get back every euro you have paid.The expenses you had would be only relevant if you earned more. For example if you earned 10000 euros and had 3000 deductible costs this 3000 euros would be useless because it will be deducted from the 10000 euros which is not taxable.
Thank you very much for those simple explanations. Though, i have a question. My husband is software engineer and he likes applying for jobs. He has an interview almost twice a week. He has hundreds of applications. He likes keeping his profile up-to-date so the companies would hire him anytime he wants to quit. You wrote that we can deduct 2.50€ for digital applications. Would a print-out of an application be enough for proof; or we just deduct the applications he already was interviewed?
Hey Nesrin. Since 2017, you don’t need to submit any proof when writing those expenses off in your tax declaration. You do need to keep proof at hand if the Finanzamt as for it in the future. I also assume that a print of the email agreeing to an interview would be proof enough.
If I applied for 100 jobs via LinkedIn or email, that would be 250€. I guess I need to show them the proof if they ask. Would screenshots of email suffice? Because that’s I would have, if I apply digitally.
Hey Pras. Just keep a copy of the emails/conversation in your inbox in case the Finanzamt asks for them. It’s fine.
I am taking driving lessons now, can I also file for a tax return for all the costs I have paid? Thank you.
Hey Louise. As a rule not (source), only if you need your driving license for your job (like delivery vans, bus driver, etc).
Thank you for the detailed explanation! I took German classes and paid for (private) university in 2020 but did not work at all during 2020. I will begin my full time job in February 2021 and want to ask if it’s possible to carry the education expenses in 2020 to claim in a tax filing of 2021 (I have heard from a friend that it is possible to carry expenses forward for up to 2 years but not sure if it is the actual case).
Thanks for your help!
Hey Ha. As stated in this source, education expenses are deductible up to 7 years in some cases, when just starting out your professional life.
Hi Bastien, thanks for a very detailed and well-explained info! It seems like there are a lot of expenses that I can use a tax excemption for. Two things still bother me though.
– One is, since last year I moved to Germany to start a job here (from my home country, Bulgaria), I don’t understand what I can use as deductions. I had to rent a flat and register in the Bürgersamt (to get a german bank account etc.) but I still go back to home for Christmas and in the summer I spent a long time in home office there. Yet, I don’t pay rent there but rather I live in my parents’ second flat (so not with them) with my younger sister. I don’t think it qualifies as a second home (as I don’t pay any of the bills there), but it’s still `the centre of my life’ so I am not sure. In any case, can I claim at least my flight tickets or anything?
– The second question is about transportation. Before home office, I used to cycle to work (5km away) which in princple doesn’t have any costs apart from deprecation/ wear and tear of the bike but it’s my old bike from Bulgaria so I haven’t bought it myself. However, I’ve read I can still get some deduction no matter the way of transportation based on distance. How can I determine the amount that I can actually claim?
Hey Magi. Regarding your first question, I’d ask a professional tax advisor directly. In my opinion, you probably can’t argue your residence in Bulgaria is second home in the eyes of the Finanzamt, as you would need both addresses to be in Germany. One is main address, one is second address taken for work. Second question: answer is in the post. Use Gmaps to calculate distance between your home in GErmany, and your office.
Thank you for responding and for the helpful information again!
Hey Bastien,
Thanks for putting this together. Question for you, how does Kurtzarbiet (short time work) affect taxes? Do we need to deduct or pay more for recieving that government program?
Hey Tyler. The Kurzarbeitgeld itself is tax-free. However, it may lead to a higher tax rate due to the tax progression system/ tax brackets. (Source). It needs to be put in your tax declaration forms and it may lead to repayment from your end.
Thank you very much for the info!
I would like also ask a question. Now I work full time (probably will change it till 30 hr. per week) because I want to take online course/school , duration 9 month (aprox.). In this case could I ask to refund a cost for this course even If I’m not a proper university student?
Thank you!
Hey Zhanna. The costs involved in any education/Weiterbildung can be eligible to deduction. It doesn’t need to be a university.
Thank you for this nice explanation! My husband and I came to Germany to learn the language in 2019 with blocked accounts and then he started working in the middle of 2020.
1) Can we still get tax returns for 2019?
2) We also furnished a house in the middle, can we submit the cost of the furniture in the report?
3) How about new phones that were purchased as part of a payment plan?
Thank you so much in advance
Hey Sarah. 1)yes. Check this dedicated post about tax returns in Germany, when you have to do one, how much time you have etc. If you are freelancers, you will need to use a Steuerberater as you are past the deadline. 2) Most likely not. 3)Most likely not. Unless you are freelancers, and those phones are used for your business, that’s not possible.
Thanks for the article!
Just so that I’m getting this right – Are tuition fees and education charges only tax deductible if they were paid for by your personal income? For instance, I’ll be enrolled in a Masters degree (which also allows “Studentwerk” besides studies), this year but this is being paid for by parents/family. That wouldn’t be deductible, right?
Hey Uddeshya. Correct, it would not be deductible.
Hello Bastien,
I’m in the process of applying for a long-term Visa D due to a work contract and once in Germany I’ll apply for the Blue Card since I comply with the requirements. I’m currently outside Germany. Will it be possible to deduct any / some of the expenses (embassy fees, travel costs, health insurance, initial rent, etc) from my first year taxes?
Hey Javier. In general, costs associated to relocating to Germany because of a job do qualify and you can make use of the lump sum rule, as detailed here. If you want to maximize this even more, I’d get in touch with someone more knowledgeable in the specifics for each expense type you might have.
Hi there!
Is is possible to claim self-funded medical expenses if the provider is based in another (non-EU) country but does provide a tax invoice. Eg. Online pilates (certified).
Thankyou!
Hey Fiona. The expense itself needs to qualify into the right category in the eyes of the Finanzamt. The provider doesn’t have to be based in Germany.
Thank you for making this so easy to understand. I have recently bought an apartment and paid a huge fee to the broker. Is that deductible? Also I did not ever claim deduction for language classes. Is it possible to do it in the next year? Thank you
Hey Archana. Kaufnebenkosten are not deductible. Source. You can claim costs for language classes yes.
Thanks a lot for the helpful information.
Some Questions:
1) can I claim flight costs to and from home country? and is there a limit to it?
2) Money which I have transferred to home country for supporting parents, any limit?
3) if I only started working in Germany in October, can I claim refund for the months I was not in Germany?
Hey Varun. 1) Yes, you can make use of the lump sum, as mentioned here.. 2) No. that is basically impossible to pull off with the Finanzamt, especially if they aren’t German residents. 3)Can’t tell you.
Hi, very useful. Would you happen to know if it is possible to deduct things (like electronics bought in a different EU country or renovation work done by non-German crew) if they were paid in different currency (ie VAT paid in another country)?
Hey Magda. If you were a German resident when you had those expenses, sure.
Thank you for the detailed overview, it is very helpful! I finished my undergrad studies in Germany last year but was only able to get a job this year. Could I include the cost of my tuition (for 2019 or even earlier) in my tax return for 2020?
Hey Regina. As stated in this post, you are able to submit a declaration for each year retroactively up to 4 years in the past.
Hi,
Many thanks for this really useful article, it’s so helpful to have this information in English. My only question is about health insurance – I don’t see mention of it above (only pension information). I think it’s the case that health insurance premiums, whether public or private, are tax deductible for freelancers and self-employed as a “special expense” (Sonderausgabe)? I really hope that’s the case, as these premiums are very expensive in Germany, but it’s been a little difficult to find a clear answer on this.
Many thanks!
Hey CJ. Yes, you are right. Health insurance costs are deductible for self-employed people. Here is a source with a lot more details.
Hi, I’ve been browsing through your website for a while today, it’s really useful, thank you!
I have to take German lessons for advancing in my current job(subsidized by my employer). I got the impression that I still need to watch out for what kind of a course I take in order to qualify for a tax deduction, even in the case of already having a confirmation from my employer. I’m confused as to how I can find, let alone keep up with a profession-specific course if I don’t know German yet. Do you know by any chance how this works or if it’s ok to take a general course?
Thank you very much!
Hey Adriana. If your employer is paying for your classes, you won’t be able to deduct those costs privately. I’m not aware of any restrictions regarding to German classes either.
Thanks for providing so much info! I just wanted to ask, if you had any more information/resources on the subject of ‘Secondary residence taken for work’?
I want to sublet a room from my friend to use as studio space, but we’re stuck right now, on how to do it exactly! As she is not technically allowed to rent her apartment as an ‘office’, just a standard sublet. I’d like to be able to write it off as business expense, so we would need to have some paper trail. Any info would be very much appreciated!
Hey Sarah. It seems that you already know the answer. Either you trespass and rules and try your luck even if you are not exactly allowed, or you find another space to work from. [edit: reading your comment again, it seems that you are confused on the definition of what that expense could be]. A secondary residence can be put off in taxes if because of your work, you need to live away from your main residence. Reading your comment, it seems that it’s not the case here. You just want to rent a workshop to work from. More info about the Nebenwohnung business here.
I bought a laptop last year. But I just started working as an intern this year. Can I apply for a tax return on my laptop?
Hey Rohan. I would assume that you were a student last year. If so, you can deduct this expense as stated here.
Hey,
So I am planning to submit my tax returns through ELSTER and how do I show the bills for the smartphone and laptop which I would like to apply for the claim?
Thanks 🙂
Hey MJ. You just keep them in your archives, safe somewhere. You only submit them as proof in case the Finanzamt requests to see them.
Thank you so much for taking the time with all this useful advise. Makes understanding so much easier than asking the wife to translate stuff she doesn’t understand herself. Big up!
Hey Rob. Glad it could help!
Excellent description of every item! I will keep track of my online applications 😀
Hey Francisco. Glad you liked the overview!
Very well organized and simple overview
Thanks Ramzi. Glad you liked it! 🙂