Tax

Germany is one of the only countries which taxes your world-wide income.

Your nationality does not play any role for tax liability and your tax burden.

Holder of scholarships with no other income are not tax liable.

The amount of your tax is calculated in two steps:

In the first step your monthly wages are taxed on basis of the entries of your tax card.
In a second step, the taxation is re-calculated by filing a individually tax declaration.
The latter can give a positive or an expensive surprise.

Income Tax in Germany
The taxation in Germany is to be said one of the highest in the world. Fortunately, this is not true! At a closer look, Germany ranks in the middle field, to be exactly on place 21 world-wide. Unfortunately, the German tax law is known as one of the most complicated in the world. This is true! Not only for foreigners but also for Germans is the German taxation system a mystery and hard to overlook.
\| Fundemental facts\| Am I liable for tax in Germany?\| Double taxation treaties \| Which income is taxed \| Tax classes \| \| Tax card \| Noncompulsory filing of tax return \|

Fundemental Facts Germany is one of the only countries which taxes your world-wide income. Your nationality does not play any role for tax liability and your tax burden. Holder of scholarships with no other income are not tax liable. The amount of your tax is calculated in two steps: In the first step your monthly wages are taxed on basis of the entries of your tax card. In a second step, the taxation is re-calculated by filing a individually tax declaration. The latter can give a positive or an expensive surprise.
Am I liable for tax in Germany? Everyone who has a Place of Residence in Germany or has – as we say – a Usual Place of Abode for more than six month, is taxable with his/her world-wide income according to German Tax laws. Within the tax law, Place of Residence means to hold a residence. This does not depend on a tenancy agreement or the fact whether you have registered this place with the Registration Office. According to tax law, all evidence of your non-temporary stay in Germany proofs your tax liability. A usual place of abode is assumed if you stay for more than six months at a time. If you do have the right to use the residence regularly, you automatically fall under the tax law. This period of six months also applies, if the stay is interrupted. Also, the six months period does not have to be within one calendar year. You are recognized to have a usual place of abode in Germany if you arrive in Germany - for example - in September, then spend the Christmas Holidays in your home country and continue to live in Germany from January until the end of April. In this case you are fully liable to pay taxes from September until April.
Tax Card The following is an exemple of a tax card, which is automatically send to your registered address. Please make sure that all information (name, address, date of birth etc.) is acurrate and without errors. If you have not received a tax card, you can apply for a card at your registration office.