Tax ID and Tax Number: Everything You Need to Know! In Germany, there are various numbers for different types of income and tax purposes. This can get quite confusing: tax identification number (TIN), VAT identification number, tax number, eTIN – what is used for what? We’ll clear this all up for you!
Tax Identification Number (Steuer-ID)
When you are filing your tax return or filling out a personal information form for a new job, you should always have your tax ID number, also known as TIN (Steuer-ID), on hand. Every person who is registered in Germany (or is liable to pay taxes here) automatically receives an 11-digit tax ID which is used for all tax purposes and never changes, not even when you move or get married – it’s valid for life. The Federal Central Tax Office (BZSt, Bundeszentralamt für Steuern) issues this number – it is often the first piece of mail that a baby receives after its birth and is even valid 20 years after death. The Federal Central Tax Office stores the following information together with your tax ID:
- First and last name
- Previous names
- Current address
- Academic degrees
- Religious name/artist name
- Date and place of birth
- Responsible finance authorities
- Date of death
The German government introduced tax IDs in 2007 as part of the eGovernment strategy, with the intention of replacing the tax office’s (Finanzamt) old tax numbers. The number keeps your personal and tax data clearly and unambiguously in one place and simplifies communications between you and the tax authorities, as well as between the authorities themselves (e.g. tax offices, family benefits and pension offices).
Tax IDs also make tax evasion more difficult. For example, in the case of exemption orders (Freistellungsaufträge), it can be quickly determined if you exceed the savings allowance (Sparer-Pauschbetrag) and have to pay tax on your capital gains (Kapitalerträge). It can also help prevent benefits such as child benefits (Kindergeld) being paid out twice by mistake. Social benefit providers such as employment agencies (Arbeitsagentur) and health insurance companies are also required to transmit important tax data to the tax authorities using your tax ID.
When you need your Tax ID:
- For correspondence with the tax office (applications, notifications, tax returns)
- Your employer needs your tax ID to pay the wage tax. You don’t usually have to provide your tax ID in the case of marginal employment (geringfügige Beschäftigung), since mini-jobs are usually taxed at a flat rate (pauschal besteuert) and your electronic wage tax deductions (ELStAM) are irrelevant.
- When applying for child benefits (Kindergeld) at the family benefits office (Familienkasse, since 2016)
- When opening bank accounts and savings accounts (since 2018)
- For exemption orders (since 2011)
- Pension insurance institutions must use your tax ID transmit your pension payments to the tax authorities, which also determines whether you’ve exceeded the basic tax-free allowance (Grundfreibetrag) and have to pay tax on parts of your pension.
- For your BAföG application: Student unions need your tax ID to transfer relevant data to the tax authorities. For example, they store information declaring your contribution amounts for health insurance, long-term care insurance, and old-age provisions (since 2016). Exemption orders for capital gains are also checked to estimate any assets.
- For deducting alimony (Unterhaltsleistungen) as an extraordinary expense (außergewöhnliche Belastung): You have to state the supported person’s tax ID on your tax return.
Your employer also uses your tax ID to send your income tax statement (Lohnsteuerbescheinigung) to the tax office. The eTIN, which you can find on your income tax statement, can be used as an alternative – but this will be completely replaced by tax IDs in by 2022.
Tax numbers (Steuernummer), which are assigned to you by your local tax office, are currently still in use but are to be fully replaced by tax IDs. The tax office can use tax numbers to quickly identify your income tax return and assign it to you accordingly. If you’re employed and working as a freelancer simultaneously, you will receive a separate number for each type of income. Freelancers and self-employed persons must show their tax numbers on their invoices – this also applies to small business owners who are exempt from sales tax.
Self-employed persons and entrepreneurs can alternatively indicate their VAT identification number (Umsatzsteuer-Identifikationsnummer) on their invoices, which is necessary if they offer their goods or services throughout the EU. You can apply for a VAT identification number from the Federal Central Tax Office (BZSt).
The tax number’s structure varies from state to state; however, the introduction of the ELSTER procedure for electronic tax returns is causing tax numbers to be restructured to a uniform nationwide scheme with 13 digits, including a personal distinguishing number and one check-digit at the end.
If you move residences and your local tax office changes you will be assigned with a new tax number (not to be confused with your tax ID, which always stays the same). If you don’t yet have a tax number, you will receive one when filing your first tax return. Married couples who choose to be assessed together are assigned a joint number.
You can learn more about tax numbers in this article.
Where can I find my tax ID?
Did you lose the letter from the Federal Central Tax Office (BZSt) stating your tax ID? No worries – it can also be found on your pay slip (Gehaltsabrechnung), your income tax statement (Lohnsteuerbescheinigung), or on your last tax assessment notice (Einkommensteuerbescheid).
You can also request your tax ID from Federal Central Tax Office using this form. The processing time lasts up to four weeks – and in some cases, the information can take a bit longer than that.
Tax IDs as new citizen numbers
The Bundestag and Bundesrat recently passed the so-called Register Modernization Act (Registermodernisierungsgesetz) which allows your tax ID to become your citizen identification number (Bürger-Identifikationsnummer), if you agree to it. The citizen identification number is essentially your digital fingerprint which you can use to identify yourself to different authorities, allowing about 50 government databases to have access to your personal data and exchange it with each other (including health insurance, resident, driver’s license, and weapons registers). This ensures that you only have to present your data to these authorities one time and enables administrative processes to be efficiently handled digitally. The Federal Administration Office (Bundesverwaltungsamt) serves as the central administrative authority for your citizen identification number – they can retrieve your personal data from the Federal Central Tax Office (BZSt) and transfer it to other public authorities.
Those who oppose the conversion of your tax ID into citizen IDs, such as data protection commissioners and a survey by the Bundestag’s scientific service, see this conversion as very questionable from a constitutional standpoint. They say the possibility of your data being abused is too uncertain. Your citizen ID could be used to create a comprehensive personality profile that the state would have access to which goes against a 1983 ruling by the Federal Constitutional Court (Bundesverfassungsgericht), as it contradicts your fundamental right to decide how your personal information is used (or in the legal jargon found in the German constitution – informational self-determination).
When tax IDs were introduced, the grand coalition promised they would be used solely for tax purposes and not as a uniform personal ID, therefore, it is very possible that the Federal Constitutional Court (Bundesverfassungsgericht) will overturn the Register Modernization Act. The Austrian model could serve as an alternative: in Austria, area-specific personal identification numbers are used to identify registered citizens for administrative processes, making it more difficult to centrally merge citizens’ data and preventing possible data misuse.