Submitting your tax declaration

Not everyone has to submit a tax declaration to their respective tax office. For most employees the amount of payroll tax deducted from their monthly wages is sufficient. Hence, in some cases employees must file a tax return. There are various deadlines, that must be adhered to; otherwise, there could be consequences.

The main topics regarding tax declaration submission include:

Tax ID and tax number

  • The tax ID is a tax identification number. This sequence of numbers is assigned to a person permanently and nationwide.
  • The tax number is assigned to a person by their respective tax office where your residence is located.

Who is required to submit a tax declaration?

You are obligated to file a tax return, if one of these conditions applies:

  1. The tax office has entered a tax exemption (Freibetrag) (Hence, there is no compulsory tax assessment, if the gross salary did not exceed 10.800 Euro that year and the tax payer did not have any additional income).
  2. The taxpayer received income without income tax deducted or received benefit replacement rate Lohnersatzleistungen that are more than 410 Euro and are subject to progressive tax Progressionsvorbehalt. Among the benefit replacement rates are unemployment benefits, short-time compensation, sick benefits, maternity pay, insolvency payments and parental allowance. The same goes for additional payments during partial retirement.
  3. In the case of separated spouses, the training allowance Ausbildungsfreibetrag, disability or survivor's lump sum (Behinderten- or Hinterbliebenenpauschbetrag) for children is not divided 50/50.
  4. If a tax payer was working for two or more employers during a part of the year – this means at least one salary is subject to tax class 6.
  5. The tax payer received severance payment using the fifth method Fünftelungsmethode.
  6. The tax payer received investment income subject to final withholding tax on which no final withholding tax has been paid.
  7. Holiday compensation is received from the wage compensation fund of the construction industry.
  8. Spouses have chosen the tax class combination IV-factor/IV-factor or III/V.
  9. Ancillary income - for example, rental income, income from agriculture or other income such as profits from cryptocurrency transactions – exceed 410 euro.
  10. In the case of a trade or other self-employed work.
  11. The payroll tax card includes a spouse living abroad in the EU.
  12. If the taxpayers domicile is abroad, but the unlimited tax liability has been applied for Germany.
  13. Pensioners have taxable income higher than the basic tax-free allowance. For example, part of the pension is usually taxable. The flat-rate advertising costs or specific demonstrable advertising costs increase the limit at which income must be taxed.
  14. Retirees receive more than 11,600 euro in remuneration. Officials whose pension lump sum for remuneration was higher than the insurance contributions to be recognized must also file a tax return.
  15. The tax payer wants to claim a loss carry-over.

Deadlines: those that have to submit a tax return have time until 07/31 of the following year. People who voluntarily submit their tax return can do this up to 4 years retroactively.

Burden of proof: As of 01/01/2018, it is no longer necessary to send proof to the tax office. You are only required to retain your documentation.