Income tax on residents:

• 0% – Up to €10,347 of annual income is tax-free.
• 14% – Applies to income between €10,348 and €60,000.
• 42% – Applies to income exceeding €60,000 and up to €277,825.
• 45% – Applies to income exceeding €277,825.

Deadlines for income tax returns

May 31st is the typical deadline to file your German income tax return for the year following the tax year.

Non-taxable minimum in Germany

Germany the tax-free threshold (€10,347 in 2024).

Special regimes

Church Tax (Kirchensteuer): Members of officially recognized churches (Catholic or Protestant) pay an additional church tax of 8% or 9%, depending on the federal state where they reside.

Deduction

Germany offers several ways to lower your income tax:

• Maximize deductions: Work expenses, standard deduction, and others reduce your taxable income.
• Explore tax credits: Get tax breaks for childcare, energy-efficient renovations, or retirement savings.
• Strategize tax brackets: Spread income across brackets if possible to optimize your tax rate.
• Use tax-advantaged accounts: Contribute to retirement plans with tax benefits.

Procedure for refunding overpayments

Germany uses annual tax returns for overpayment refunds. File by May 31st electronically or on paper. Accurately report income and claim deductions (work expenses, donations). The system calculates your refund and automatically deposits it to your bank account after processing your return.

Getting tax number in Germany

Residence registration triggers automatic tax entry with a tax ID mailed to you.

Additional registration with the tax office might be needed in some cases:

• Businesses requiring a trade license.
• Businesses exceeding €17,500 annual turnover (VAT registration).

Penalty

Late Filing –  penalty of 0.25% per month (min. €25/month) up to a maximum of 25% of the owed tax.

Underpayment –  Interest on unpaid amounts accrues monthly.