German Tax Return (Einkommensteuererklärung)

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

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 2022, it is possible to apply tax return of year 2018, 2019, 2020 and 2021.

However, if taxpayer is supposed to pay taxes then he should file tax return before 31st July 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.

Tax filing for year 2022 started from January 2023

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 (If you travel home to office by public transport then we can claim travel ticket cost. You can only claim one-way travel per working day, which amounts to 0.30 euros per kilometer for one-way travel to work. If you have not public transportation tickets then you can give train tickets or bank statement also as proof)

    2. Relocation expenses (e.g. you moved from India to Germany or within Germany) : Actual expenses and flat rate expenses can be claimed.

    3. Training costs : Cost for professional development like professional books, training, language course etc. As a student it is possible to deduct a variety of educational expenses from your taxable income, which will reduce your tax burden and increase your refund. You have to keep the fee payment receipts and prove it to the tax office. Interest payment of Education loan can also be deducted

    4. Office Equipment: If you purchase mainly for Professional purpose like laptop, Desk, chair, Bookshelves etc. can be deducted in full as income related. Invoice is required as proof.

    5. Job Search related expense – if you have expense related to job search, you can claim the costs against tax. you need receipts (tickets and Interview letter) as proof.

    6. Home Office : In your 2020 tax return, some euros can simply be deducted for each calendar day spent exclusively working from home. The lump sum is limited to 600 euros per calendar year and the limit of days that can be deducted for remote work is 120 days. The Home Office Lump Sum is valid for the years 2020 and 2021.

    7. 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)

1) Home maintenance expense:

You can for expenses paid for craftsmen services (i.e. painter, plumber, decorator) for your rented or own house in Germany. Invoice and bank statement as proof of payment are required.

2) 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 (Ideally 65+ as per German Govt. rules)

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

  • From Year 2016 : Maximum Euro 2163 per person per year

  • From Year 2017 : Maximum Euro 2210 per person per year

  • From Year 2018 : Maximum Euro 2250 per person per year

  • From Year 2019 : Maximum Euro 2292 per person per year

  • From Year 2020 : Maximum Euro 2352 per person per year

  • From Year 2021 : Maximum Euro 2436 per person per year

  • From Year 2022 : Maximum Euro 2496 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 Dependent support declaration form (Unterhaltserklärung) 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.

Send an email to us to get excel template of checklist of documents and details.

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 expect the refund in 8-12 weeks

Template of Lohnsteuerbescheinigung (Wage tax certificate)


Lohnsteuerbescheinigung Sample 2021.pdf

Dependent support declaration form (Unterhaltserklärung)


Dependent Support declaration form.pdf