Income Taxes

If you reside and work in Germany, you pay taxes in Germany (Lohnsteuer). Taxes are also levied on income such as investments, rental property, gifts, inheritance etc. (Einkommensteuer).

For most of you, your employer sends the appropriate tax directly to the government (Finanzamt). The amount - as a percentage (14 to 42%) of your income - depends on how much you earn and your taxation class (Lohnsteuerklassen 1-6). During the following calendar year, when you file a tax return, adjustments are made if you paid too little or too much in taxes.

It gets more complicated if you are self-employed. Depending on how much you earn, you may have to pay taxes in advance, estimating your potential earnings per quarter. Most Germans who are self-employed have a tax accountant.

You may also be liable for taxes in your home country, although Germany has signed agreements with many countries to avoid double taxation.

In general, if you feel that your income tax situation is complicated, find a good tax accountant. They know best what deductions you are eligible to take. Even though you have to pay for the service, the amount you might get as a refund makes it worthwhile — not to mention the time saved - and the service is tax-deductible.

Zweitwohnungsteuer

Starting January 1, 2017, a tax is levied if your Karlsruhe place of residence is not considered your main address (Hauptwohnung), rather a secondary address (Nebenwohnung or Zweitwohnung). For example, if you work in Karlsruhe and have an apartment for during the week, but you commute to your family on weekends, your apartment is probably registered as a secondary address. The tax amount is 10% of the yearly net rent. This is a local or municipal tax decided by the City of Karlsuhe. If you have registered your place of residence as a Zweitwohnung, then the city (Meldeamt) will send you information about this in the mail. If you do not receive this information and have a Zweitwohnung in Karlsruhe, you must inform the city (Meldeamt) of this status and pay the tax.

Finanzamt

The Finanzamt Service Center can provide you with forms, answer questions, hand out information etc. You must come in person, take a number and wait to be called. If you have specific questions, bring a form of ID with you as well as your SteuerID-Nr. or Steuernummer.

If you live in the Karlsruhe, the tax authority is the

Finanzamt Karlsruhe-Stadt
Schlossplatz 14
76131 Karlsruhe

If you live in the Karlsruhe region (Kreis Karlsruhe), the tax authority is the

Finanzamt Karlsruhe-Durlach
Prinzessenstr. 2 (main building)
76227 Karlsruhe

Deadline for Filing a Tax Return

If you are required to file an income tax return (Einkommensteuererklärung), then it must be done so by May 31 of the following year, i.e., for the 2016 calendar year, the income tax return must be filed by May 31, 2017. There are exceptions, but there are also penalties for late filing. If you think you can't file on time, ask for an extension.

How to File

File electronically using the free software ELSTER. (www.elster.de).

Important Numbers

Steuernummer - is a 13 digit number the Finanzamt uses to identify you. The first 4 digits refer to the Finanzamt responsible for you. This number will appear on all correspondence with the Finanzamt. This number can change if you change professions or if you move to another region of Germany.

Steuer-Identifikationsnummer - is an 11 digit randomly generated number assigned to each person who is liable for taxation. This number stays with you forever, regardless of where you are living. This number is sent to you by the Bundeszentralamt für Steuer and should be on your wage and tax statement.

eTIN - was a number introduced when the electronic ELSTER system was introduced and is no longer used.

Deductions

Some helpful deductions are:

Children under the age of 18
Charitable donations to German entities (up to a certain limit)
Moving expenses for professional reasons, such as from abroad

Keep copies of your receipts of income and expenses related to work! It helps to keep these in some orderly fashion to make filing your tax return easier.

Helpful links:

To calculate an estimate of your tax situation (in English!), check out this freeware German tax calculator:

http://www.parmentier.de/steuer/index.php?site=tax-wage

 

The Finanzamt in Esslingen has a nice pdf explaining in English how to register to be able to use the electronic filing system ELSTER.

http://www.fa-esslingen.de/pb/,Lde/Englische+Kurz_Anleitung+zur+ELSTER_Basis_Registrierung_/?LISTPAGE=367704