There is a close link between working in Germany and filing a tax return. But what if you don't file a tax return? How does this affect you?
If you work in Germany, you probably have to file a tax return. However, there may be situations where you do not meet your tax obligation when filing your tax return. Which are those?
Meeting the statutory filing deadlines is a basic obligation of every taxpayer. The deadline for filing the German tax return is 31 July of the following calendar year. This deadline for the year 2021 has been exceptionally moved to 31 October, due to special circumstances surrounding COVID19 pandemic. If you fail to comply with this obligation or if you do not file your tax return by the deadline, the German tax authorities may impose a financial penalty.
Failure to meet the deadline for filing your tax return carries a penalty of 0.25% of your tax liability. However, the minimum amount is €25 per month, which the German tax office will impose on you for each month you are late.
We recommend: If you find that you have not filed your tax return on time, do so as soon as possible!
If you have incurred an overpayment of tax, the German tax office will automatically withdraw the penalty from your overpayment. If, on the other hand, you incur an underpayment of tax, the amount of the underpayment will be increased by the amount of the penalty assessed.
You do not, of course, face any penalty for not filing a voluntary tax return, as it is voluntary. Nevertheless, failure to do so will most likely result in an overpayment of tax or a German tax refund. Don't forget that you can apply for a tax refund up to 4 years in retrospect!
Do you need help filing your tax return? Let our tax experts advise you on what you can deduct from your taxes to get a bigger overpayment. You can even complete your tax return quickly and easily yourself using the online application. All of our services for Germany can be found on our website.