German Tax System

In every case please ask a consultant for special requests.

PLEASE REMEMBER: The German tax system is very complicated and we can`t write every law in German in just one homepage. We have tried to show you the German tax system in an easy way. For all the following details there are a lot of special rules which have not been descriped by us. Please speak with a tax consultant.

Who must pay tax in Germany?
Examples for workers and freelancers with no income from interest arising out of stocks and bonds and rents:

On the first of May 2013 you moved from England to Germany and since then you have been living and working in Munich. Your only household is in Germany. So you have to make an income tax return for 2013 in Germany. In this tax return all income you will get in 2013 has to be filled in.

On the first of May 2013 you have started to work in Germany. Your family is still living in England and once a month you fly home. You live in a hotel or a flat. In this case you have different opportunities:

If you say your first / main household is in England, you will pay tax on the income that you earn in Germany. For all other income you have to pay tax in England.

If both spouses combined income, which will be declared in Germany, more than 90 per cent of the hole income or is their income from the homecountry less than 12.272 Euros, it´s also possible to pay only tax in Germany.

On the first of May 2013 you have started to work in Germany. Your are single with a household in England and in Germany. Once a month you fly home. In this case you have different opportunities:

If you say your first / main household is in England, you have to pay tax on your income that you earn in Germany. For all other income you have to pay tax in England.

If your income, which will be declared in Germany, more than 90 per cent of the hole income or is your income from your homecountry less than 6.136 Euros, it´s also possible to pay only tax in Germany.

Which opportunity should I choose?
It´s difficult to find the best choice. You have to check a lot of points such as the rate of taxation in the both countries. Normally it`s better to contact a tax consultant to find the best way for you to save tax.

How high is the rate of taxation in Germany?
The rate of taxation is variable. The exact rate of taxation depends on the amount of taxable income. The rate of taxation in Germany vaies from 14 % to 45 % in 2013. The tax allowance for Single people in 2013 is 8.130,00 Euro, married couples who live in Germany together have a tax allowance of 16.260,00 Euro.

Which income must I fill in the income tax return?
Your income from:

An employment.

Work as a freelancer

Interests / Dividends

Pensions

Rents

Speculations

A commercial enterprise

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