Germany tax return (Steuererklärung) deadline: 31 July for voluntary filers; 28 February (next year) with a tax advisor. Must-file: self-employed income, multiple employers, social benefits received. Key deductions: Werbungskosten (€1,230 flat or actual), Sonderausgaben, pension contributions. Germany taxes residents on worldwide income; progressive rates 14–45%.
At a glance
Key Facts
Tax Year
Calendar year: 1 January to 31 December
Filing Deadline
31 July of the following year (voluntary); 28 February of the year after that (with Steuerberater)
Online System
ELSTER (Elektronische Steuererklärung) — official free portal; third-party apps (Wundertax, Taxfix) also accepted
Tax Rates
Progressive 14–45%; solidarity surcharge 5.5% on income tax (only for high earners since 2021); church tax 8–9% if applicable
Grundfreibetrag
€11,784 tax-free allowance (2024); below this threshold, no income tax applies
Introduction
The German tax return — Steuererklärung — covers the calendar year (1 January to 31 December) and is submitted to your local Finanzamt (tax office). Unlike the UK or US, many German employees on standard employment do not need to file — wage tax (Lohnsteuer) is withheld by employers and often no further action is needed. But for expats with foreign income, self-employment, or multiple income sources, filing is mandatory.
This guide covers who must file a German tax return, the ELSTER online system, key deductions available to expats, and how Germany handles foreign income including treaty credits.
Section 01
Who Must File a German Tax Return
Filing is mandatory (Pflichtveranlagung) if you:
Are self-employed or have business income
Had income from multiple employers simultaneously
Received unemployment benefits (Arbeitslosengeld), parental leave (Elterngeld), or short-time work compensation (Kurzarbeitergeld) above €410
Had income not subject to Lohnsteuer withholding (foreign pension, rental income, investment income above Sparer-Pauschbetrag)
Are divorced and both spouses have income
Used the splitting tariff (Ehegattensplitting) and one spouse worked abroad
Have foreign income that Germany has the right to tax under a treaty (or that affects the progression rate)
Voluntary Filing (Antragsveranlagung)
Even if not mandatory, filing a return is usually beneficial for employees with: home office costs, extraordinary expenses (medical, childcare), trade union fees, job-related expenses above the flat Arbeitnehmer-Pauschbetrag (€1,230), or savings deposits below the Sparer-Pauschbetrag (€1,000). German statistics show ~75% of voluntary filers receive a refund — average refund approximately €1,095/year.
Residency for Tax Purposes
Germany taxes individuals who have a Wohnsitz (permanent home) or gewöhnlichen Aufenthalt (habitual abode — present more than 6 months) on their worldwide income. New arrivals become German residents from the date they establish a Wohnsitz. For partial-year residents, only income during the period of German residence is taxable — Germany typically applies split-year treatment.
Section 02
Key Deductions for Expats
Werbungskosten (Work-Related Expenses)
Flat allowance: €1,230/year — automatically applied without receipts
Actual deductible costs if higher: commuting expenses (€0.30/km one-way, €0.38 from km 21+), home office (€6/day up to 210 days = €1,260 max, or actual room costs), professional training, work equipment, union membership
For expats: relocation costs to Germany for employment are often deductible if employer-required (removal costs, travel expenses, double rent during transition)
Sonderausgaben (Special Expenditure)
Pension contributions (Rentenversicherungsbeiträge) up to €27,566 (2024) for compulsory pension payments
Health insurance premiums (compulsory contributions are fully deductible)
Private pension contributions (Riester, Rürup)
Church tax, charitable donations (up to 20% of income)
Medical expenses above a means-tested threshold, disability allowances, childcare costs (two-thirds of up to €4,000/year per child) — all potentially deductible.
If an expat maintains a second dwelling for work purposes (e.g., in Germany while family home is abroad), costs up to €1,000/month are deductible. This is a commonly used expat deduction.
Section 03
Foreign Income on a German Tax Return
Germany taxes residents on worldwide income. For income also taxable in another country:
Exemption Method (most treaties)
Germany uses the exemption method for employment income in most of its treaties — if you work in France and pay French income tax, Germany exempts that income from German tax but uses it to determine your German progression rate (Progressionsvorbehalt). This means even exempt foreign income can push you into a higher bracket for your German income.
Credit Method (dividends, interest, royalties)
For investment income withheld at source (US dividends at 15% treaty rate, UK dividends), Germany credits the foreign withholding tax against the German Abgeltungsteuer (flat 25% + solidarity + church tax). Include this on Anlage KAP.
US Citizens in Germany — Extra Complexity
US citizens must file a US return (worldwide income) and a German return (worldwide income as resident). Germany taxes comprehensively; the US Foreign Tax Credit is used on the US return to credit German taxes paid. If German taxes exceed US taxes on the same income, US tax liability is typically zero. However, the interplay of Anlage N-AUS, German progression rules, and US FTC baskets requires specialist knowledge.
ELSTER Filing for Foreign Income
Anlage AUS (Ausländische Einkünfte) is the supplement for foreign income in ELSTER. You report the foreign income, the taxes paid, and indicate which treaty applies. Some forms require paper submission for complex cross-border scenarios.
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ELSTER (Elektronische Steuererklärung) is Germany's free official tax return system. You create an account at elster.de using your Steuer-Identifikationsnummer (11-digit tax ID issued on registration with German authorities). Expats can use ELSTER — you don't need a German bank account or German phone number to register, just a tax ID. ELSTER is available in German only; expats who don't speak German often use third-party apps: Wundertax, Taxfix, or Smartsteuer, which have English-language interfaces and allow submission via ELSTER's backend. Note: very complex returns with multiple foreign income sources, business income, or partnership stakes may still be better handled by a Steuerberater (tax advisor), as ELSTER's question flow can miss important details for complex situations.
Q
Do I need to file a German tax return as a salaried employee?
Not necessarily — many employees are automatically taxed correctly through Lohnsteuer withholding and have no obligation to file. However, filing is mandatory if you had income from multiple employers simultaneously, received transfer payments (Lohnersatzleistungen), or have additional income sources. Even if not mandatory, filing is almost always beneficial if you have: a home office, significant commuting costs (over the flat Arbeitnehmer-Pauschbetrag of €1,230), medical expenses, church tax to reclaim, or employer benefits that need to be declared. The German statistics are compelling: the average refund for voluntary filers is approximately €1,095. The only scenario where filing might result in a bill: if you had significant untaxed income or incorrectly received a benefit.
Q
How does Germany tax foreign rental income?
Foreign rental income must be declared on your German tax return if you are German resident. Use Anlage V (Vermietung und Verpachtung). The income is added to your German tax base and taxed at your marginal rate (14–45%). German rules for allowable deductions broadly follow German domestic rules — mortgage interest (full deduction, unlike UK restriction), depreciation (AfA: 2% per year on building value for most residential property), repairs, management fees, property taxes, and insurance. Foreign taxes paid on the rental income (property tax, local income tax) are credited using Anlage AUS. Note: if Germany has an exemption treaty with the source country (as with most EU countries and UK), the foreign rental income may be exempt from German tax but still used for the progression rate calculation — potentially increasing your effective rate on German income.
Q
What is the Progressionsvorbehalt and how does it affect expats?
The Progressionsvorbehalt is Germany's progression proviso: even when income is exempt from German tax (under a treaty), it is still counted when determining which tax rate applies to your other German income. Example: you earn €60,000 in Germany and €40,000 from UK employment (exempt under Germany-UK treaty). Germany exempts the UK income but calculates your German tax rate as if you earned €100,000 (36.9% rate) and applies that rate to the German €60,000 — instead of the €60,000 rate (32.4%). This can significantly increase the actual German tax paid on German income. The Progressionsvorbehalt applies to treaty-exempt employment income, foreign government benefits, and certain other exempt income. It is reported on the German return via Anlage N-AUS.
Q
When do I need a Steuerberater (German tax advisor)?
Consider engaging a Steuerberater (licensed German tax advisor) if: (1) you are self-employed or have business income in Germany; (2) you have complex foreign income from multiple countries; (3) you are a US citizen in Germany (US-Germany dual-filing complexity justifies specialist advice); (4) you have significant investment portfolio with foreign withholding; (5) you want the extended filing deadline — Steuerberater clients get until 28 February of the year after the following year (14 months extra vs self-filers). German Steuerberater fees are regulated and based on the value of income declared — standard fee for a €80,000 income return is approximately €500–900. Fees are tax deductible (as Steuerberatungskosten) on the following year's return.
Disclaimer:This guide provides general tax information for educational purposes only. German tax law and treaty application are complex. Rules for solidarity surcharge, non-resident withholding, and Progressionsvorbehalt change regularly. Always consult a qualified Steuerberater before filing.