Germany | Neotax

FAQ

• 1. I worked in GERMANY and paid taxes. Should I file a tax return?
  • Everybody who works abroad has to pay income tax. Under certain conditions, you can receive a refund from some of the taxes you (your employer) paid. We refund tax from Germany and we can also help you get child benefit support for your children if they are younger than 18 (or 24 in the case of university students). More about our child benefit service here!

• 2. When am I a tax resident in Germany and how do I find out if I am a resident? What is the difference between a resident and non-resident?
  • A resident of Germany generally refers to an individual who has a domicile in Germany or spends more than 6 consecutive months in Germany. A domicile is a home or dwelling owned by, or rented to, the taxpayer who has full control over the property. A non-resident is generally someone who spends less than 6 consecutive months in Germany.

• 3. What does “tax refund” mean?
  • A refund means that your employer paid more taxes on your behalf than was necessary, and you can claim the excess money back. By filing a tax return, you are actually reporting to th e German Tax Office how much you earned as gross income and how much you paid in taxes while you stayed in Germany.

• 4. Why do some agencies claim that they will refund MORE tax overpayment for you than the others?
  • There is no such a thing as “more refund” on your taxes. Be careful, because this might be a marketing trick to attract you to sign a contract. If a tax specialist does your tax return properly, according to the German tax law, the refund can be calculated in only one possible way! If an agency applies tax deductions that you are NOT entitled to, your refund will increase on one hand, but you are at a very high risk that you will have to pay it back to the Tax Office.

• 5. How much taxes are paid from your income?
  • Taxation is progressive on the individual's income in Germany. In other words, the more you earn, the more you pay. German tax rates for individuals were between 14% and 45% in 2019.

• 6. What documents do you need for your tax refund?
  • In order to receive your income tax refund as quickly as possible and to apply for the highest amount, you need to have:

    • A copy of your Lohnsteuerbescheinigung or the final payslip (Lohn- or Gehaltsabrechnung) earning document from each employer
    • Certified EU/EWR Bescheinigung form which proves your local income from your home country.

• 7. What is a Lohnsteuerbescheinigung form?
  • Lohnsteuerbescheinigung is a summary of earnings and deducted taxes by an employer during a calendar year. All employers are legally obliged to issue the form by the end of February of the following year (for example, by the end of February 2020 for fiscal year 2019).

• 8. What if you do not have all the necessary documents?
  • Even if you do not have all of the documents mentioned above, you can still apply for your tax refund. We offer a “replacement” service - we will contact your former employers and will claim copies of your payment documents as your certified tax agent.

• 9. How many years back can I file my tax refund?
  • You can go as far back as 4 years from the year in which you apply.

• 10. How long does it take to receive my tax refund?
  • It may take up to 3 - 6 months until you receive your income tax refund. This is counted from the time your documents are received by the tax authorities. The actual time may vary from case to case.

• 11. When is the deadline for filing the tax return?
  • Tax returns are due by the end of July of the following year! Please note that you may need to pay a penalty or late filing fee if you forget to file your tax return, but it may vary from case to case.

• 12. Why is your tax calculation different from the actual Tax Office calculation?
  • In some cases, tax officials calculate the tax on your Tax Return higher or lower than the Tax Office shows in the final calculation. What are the most frequent causes?

    • The Tax Office had different data on your record (your employer reported different data than you have on your Lohnsteuerbescheinigung)
    • Your employer wrongly paid more/less than was necessary
    • You may have some debt/overpayment from previous years.

• 13. My colleague/friend worked in Germany, but he got back more money. Why? (what are the causes?)
  • Basically, you only get a refund if you overpaid your taxes, because the more money you make, the more tax you pay. People who overpay, get refunds. If you receive less, that actually means you didn’t overpay. Also, if you are single, you could be in a higher tax bracket than your married friends. However, if you are married and your spouse also had income in the tax year, then you could be obligated to pay more tax than your single friends. Even though two people have the same job and earn the same amount of money, their circumstances outside of work could have a huge impact on their tax refund.