Tax Return Filing (FAQs)

Tax Return (Einkommensteuererklärung)

Because the financial year is from January to December, The tax return is filed after January of next year.

How much refund I can Get?

The chances of getting refund depends on certain factors.
As explained in the German Income tax system, you have possibility to get refund in case of conditions including

  • There are Business expenses (Werbungskosten) more then Euro 1000 per year
  • You have worked few months in Germany and rest of the year in other countries where income is low (Global Income)
  • You have provided financial support to your needy dependents (Parents/spouse/child etc.) and hence eligible for deduction (Unterhalt)
  • You have changed your tax class during the year because you got married. (Tax class change)
  • You have paid rent in Germany and in India (Double Household)
  • You visited India to meet your family, Maintain your house  and paid flight tickets. (Double Household)
  • You have kids and your income is above EUR 60000 per year and would therefore benefit more by the Kinderfreibetrag than the monthly Kindergeld (Kinderfreibetrag).- Note: Kindergeld must be applied in any case. Benefit above Kindergeld will be paid by Tax office. Kindegeld will not be paid by Tax office.
  • You have kids and there are expenses for education, Kindergarten etc.

The more conditions you satisfy, the more are the chances of getting refund.

The exact amount of refund will depend on the individual conditions.

How much time it takes to get refund?

After filing tax return with Finanzamt, it takes 8-12 weeks to get refund money in your account. Sometimes it may take much longer.
With our consultancy, money will be deposited to your account directly by Finanzamt. (German as well as Indian account). Indian account may take 1 month extra.

Can I get my pension contributions?

Yes, it is possible to get pension contributions. But that it a separate process and it can be refunded after two years of leaving Germany. For more details click here on our dedicated website for this.

Last date for filing tax return

If you are entitled to get refund from tax office, then you can apply for return in next 4 years. So in Current Year 2016, it is possible to apply tax return of year 2012, 2013, 2014 and 2015.

Tax filing for year 2015 started from January 2016.

However, if taxpayer is supposed to pay taxes then he should file tax return before 31st May of Next year.

Below are few situations where it is an obligation to file tax return before the deadline:

  • Tax office (Finanzamt) has given a free allowance on tax card
  • Married couples when both of them employed and have opted for tax classes 3 and 5 in the tax cards
  • Received tax-free benefits e.g. Mutterschaftsgeld, Elterngeld, Paid sick leave etc.
  • There are more than one employer at the same time (Except Mini-job)
  • Taxpayer who have income outside from Germany in the financial year (So in the year of relocating to/from Germany)
  • Freelancers and self employed
  • Tax office has sent you a reminder letter stating deadline to file your tax return, even if none of the above is applicable to you.

What are the legal tax savings ways?

Business expenses (Werbungskosten)

Finanzamt provides Lump sum amount (Arbeitnehmer-Pauschalbetrag) of Euro 1000 per year towards employment related expenses. This is part of default tax calculations done by employer.

But if you have any extra ordinary expenses more than Arbeitnehmer-Pauschalbetrag per year then you can declare them and get tax rebates.

Following is list of heads under which tax rebates can be claimed (practically with terms & conditions applicable)
  1. Expenses for traveling from home to office
  2. Relocation expenses (e.g. you moved from India to Germany or within Germany)
  3. Cost for professional development like  professional books, training, language course etc.
  4. Expenses for professional equipment e.g. Laptop, desktop etc. 
  5. Double household (If you have primary household in India where your family (wife and kids) is staying)
    • Flight tickets cost to India to meet family (spouse& children) back home
    • Telephone calls
    • House Rent paid in Germany
    • Food expenses for first 3 months of arrival to Germany. (Proof not required)

There are many more avenues which are mostly applicable for consultants and other working class, but for practically purposes not listed here.

If the sum of business expenses don't exceed EUR 1000 per year, there is no extra tax refund. Because this is automatically done by employer.

Extraordinary expenses (Außergewöhnliche Belastungen)

Maintenance payments to needy persons (Unterhaltsleistungen an bedürftige Personen)

Money support provided to parents/parents-in-laws/grandparents/spouse/children in India who need support 

  • Because their income is below ~EUR 2000 per year AND
  • Dependent Parents / parents-in-laws / Grandparents are above retirement age.

For Indian nationals, following maximum support money is deducible from your taxable income and applicable tax rates gives tax benefits.

  • For year 2010 and before : Maximum Euro 1920 per person per year
  • From Year 2011 & 2012 : Maximum Euro 2001 per person per year
  • From Year 2013 : Maximum Euro 2032 per person per year
  • From Year 2014 : Maximum Euro 2089 per person per year
  • From Year 2015 : Maximum Euro 2118 per person per year

To claim this benefit:

  • One must send support money directly to the bank account of supported person (parent/parents-in-law/Grandparent/spouse/child) from start of the year. Money can be sent to any once per person's account in one household (e.g. Money sent to Father's account is sufficient for father's and mother's support). 
  • Declare the need of genuine support using the prescribed Form as attached below. This form has to be certified by Indian Notary Public. 
  • The bank statements of German bank account, with debit transactions to prove that money was transferred to dependent.
  • Bank statements of dependent's bank account as proof that money was received by dependent and it was used by them for their need.

Required documents/information for filing tax return

  1. Lohnsteuerbescheinigung (This is your annual income statement from employment, you can get this from your employer. It is equivalent of Form16 of India) (You can click on the name to know how it looks like)
  2. Identifikationsnummer (11 digit unique number) and name your Finanzamt. ("Bescheinigung für der lohnsteuerabzug" has these details)
  3. Steuernummer (If you have filed your German tax return previous year, you can find it on your Assessment order (SteuerBescheid) from finanzamt.)
  4. Bank account details: German bank account details for refund purpose (Konto-Nr, BLZ, IBAN, BIC) OR Indian account details if you don't have German Account.
  5. Proof of income outside Germany 
    • If you worked outside Germany for few months between January to December, then Salary slips of that employment. e.g. you worked June to December in Germany, then salary slips of January to May of India (or wherever you worked) are also required. This is used to determine your tax slab. This income is not taxed twice.
  6. Business Expenses for official purpose. for employment related expenses. Expenses explained here)
  7. Double Household, if applicable:
    • Proof of house in India (e.g. India house rental agreement, home loan account statement, Sale deed etc.)
    • Flight tickets and Boarding passes for which you have paid
    • German Rent agreement / Rent receipts / Bank statement showing payment of rent
    • Brokerage fee
  8. KinderGeld details, if applicable
    • Name of child(ren), Date of birth
    • Amount and Period for which KinderGeld is received or not received. If kindergeld was rejected, then rejection letter is required.
    • Education, Kindergarten expenses
  9. Dependent support, if applicable (If your Parents/spouse/child are dependent on you in India and you sent money to them)
    • Proof of transfer (Your own German bank account statement with debit and your dependent's account statement to explain their income source, expenses and financial need)
    • Completed form called Unterhaltserklärung for each dependent (given below in attachment), and supporting documents. This form has to be certified by Notary and signed by dependent person.
  10. Any other income e.g. Elterngeld, Mutterschaftsgeld etc.

How to prepare tax return?

Simply Contact us and use our consultancy from the comfort of your home. We provide our services to all over world.

OR

If you are doing it on your own, there are two options to prepare the tax declaration

  1. Use the printed forms : After completing, submit the complete file to Finanzamt (Tax office)
  2. Use free software ELSTER provided by Finanzamt (Tax office)
    • You can download this free software from the website. Use the appropriate year as applicable.
    • Install and fill up the relevant forms
    • See the automatically calculated tax refund
    • Preview your tax return file before submission
    • Submit online to Finanzamt (without digital signature also)
    • Take printout of submitted tax return, Sign and attach necessary proofs in correct order.
    • Submit the complete file by post or personally to Finanzamt (Tax office)
    • You can expect the refund in 8-12 weeks

Relevant Helpful forms

SelectionFile type iconFile nameDescriptionSizeRevisionTimeUser
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Template of Lohnsteuerbescheinigung  (Wage tax certificate)  Nov 2, 2012, 3:04 AM Surendra Jain
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Form for Parents' support claim  43k v. 1 Nov 15, 2011, 6:10 PM Surendra Jain