After you file an income tax return in Germany, you’ll typically receive tax back or a tax refund – but sometimes, a tax back payment (Steuernachzahlung) can occur meaning you owe money after filing your refund. Why does this happen and how can it be avoided?
There are many factors that can lead to an additional tax back payment – this could include lump sums not being taken into account, unrecognized special expenses, or not declaring your income-related expenses. It’s important to also declare any additional income, such as income from a second job, which is also reported to the tax office by the employer.
In your tax assessment notice (Steuerbescheid) in the section labelled “Feststellung” (determination), there are detailed explanations that explain what lead to your tax refund or back payment.
What can lead to an additional tax back payment?
Unexpected high income:
If your income is significantly higher than what the tax authorities expected, there is usually an additional tax payment that must be made. This can come about due to salary fluctuations, new income from self-imployed activity, new income from a rental property, etc.
Forgetting to declare expenses on your tax return, including:
- Income from a second job
- Special expenses
- Income-related expenses
- Household-related service costs
- Extraordinary expenses
- Costs from double household management
The tax office (Finanzamt) reviews all expenses declared on your tax return and decides based on the German Income Tax Law (Einkommenssteuergesetz) and rulings from the Federal Ministry of Finance (Bundesministeriums) whether they are acceptable or not.
Some examples of non-recognized costs could include: a suit that is worn to the office, since it can also be used privately; moving residencies when it is not work-related; double household management when the second household is not closer to work or the main household is not your primary residence; or maintenance payments for parents living abroad. Certain non-recognized expenses can still be accepted when sufficient proof is provided or certain criteria is met.
Non-recognized lump sums:
Generally, most lump sums (Pauschalen) or at least part of most lump sums are recognized by all tax office – certain lump sums may not be recognized at the discretion of your respective tax office or tax official.
Some examples of lump sums include:
- 16 euros per year for account maintenance fees
- 110 euros per year for work equipment
- 20% (max. 240 euros/year) for work-related telephone and internet costs
Making an appeal
You can make an appeal within one month after receiving your tax assessment notice (Steuerbescheid) by simply providing the tax office with an informal letter. This letter can also be withdrawn without consequences.
If you would only like to make an objection for part of your tax assessment, it is advised to submit an application for a simple amendment (schlichte Änderung). More information on appeals and amendments can be found in our article here.
Did you buy a laptop or a mobile phone?
Did you move last year for work?
Did you work less than 12 months last year?
Was your work commute more than 30 minutes?
Are you married with tax class III/V?
Did you pursue a further education?
Did you receive self-employment income?
You are required to file a tax return.
Filing your tax return is worth it! You will most likely get a very high tax refund.
You can expect a high tax refund.