German Tax Information for Expats

This information was sent to us by the administration of Frankfurt International School and I found it very useful for expats living and working in Germany.

It contains a general explanation of the current tax situation. I am sure, not only newcomers to the German tax system will find this useful, but also current non-German employees such as my husband who frequently inquire about German tax terms and whether we have to act on it.

Edited e-mail version:

Within the next days and weeks, every German tax office (Finanzamt) will send letters to all registered employees in Germany.

The letter’s headline will read:

Information über die erstmals elektronisch gespeicherten Daten für den Lohnsteuerabzug (Elektronische Lohnsteuerabzugsmerkmale) – see explanation below.

This October, you will not receive a 2012 tax card from your town hall as your tax data 2012 is to be transferred electronically to the employer. Therefore, the Finanzamt is sending out this letter to have you double-check the information you have given previously. This letter is just for your information, and if the listed information is correct, it does not need to be handed to the employer, nor sent back to the Finanzamt.

Please check if your name and address are stated correctly.

Further please check the table with the headline Lohnsteuerabzugsmerkmale:

Steuerklasse (tax classification) should show one of the following:

“I” for singles or divorcees

“II” for singles with child/ren, raising child/ren without partner

“III” for married couples in which one earns considerably more than the spouse OR is the only one working

“IV” for married couples in which both are employed

“V” for married couples  in which one earns considerably less than the spouse

Kirchensteuermerkmal (church tax code) is only marked, if you have declared your membership to one of the official churches in Germany. If you have registered with a religious group, it will appear as follows:

“rk” catholic confession

“ev” protestant confession

“rk/ev” or “ev/rk” if you and your spouse have different confessions

Zahl der Kinderfreibeträge would show up if you have a child;

For example, 2,0 stands for 2 registered children.

If yours is marked with 0,5, this means that 0,5 child is counted towards your tax credit. The other half, for example, could be registered with a divorced partner.

Pauschbeträge für behinderte Menschen / Hinterbliebene  would only appear if you have applied for a tax credit due to a handicap/disability.

Report any changes/incorrect information to the Finanzamt. If there aren’t any, then just file it with your paperwork.

This does not apply to military spouses or consulate members.

Zündwarensteuer

Zündwarensteuer was a tax in Germany applied to “Zündwaren” – things that can make fire.

The tax was originally introduced in 1909 and applied to matches, but in 1919 it was also extended to lighters.

It was discontinued in 1981.

To hear a simple explanation and a short discussion in German, listen to the podcast:

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Zuckersteuer

This podcast also talks about Pfeffersteuer (pepper tax) and Schokoladensteuer (chocolate tax).

Zuckersteuer was a tax in Germany on sugar.  The tax was originally introduced in Prussia in 1841 – one year after the sugar cube was invented.  Sugar had become more popular in previous years following the introduction of the sugar beet.

The tax was discontinued at the end of 1992.

To hear a simple explanation and a short discussion in German, listen to the podcast:

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Salzsteuer

Salzsteuer was a tax in Germany on salt, specifically on table salt.

Originally salt was considered to be a luxury and hence was taxed.

The tax was discontinued in Germany at the beginning on 1993, in Austria in 1995, but continues to this day in some parts of Switzerland.

The type of salt that is used to keep roads clear in winter was not taxed. To avoid people buying the “wrong” type of salt and avoiding the tax, the latter was coloured and had a bitter taste added – a process called vergällen.

To hear a simple explanation and a short discussion in German, listen to the podcast:

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Leuchtmittelsteuer

Leuchtmittelsteuer is a tax that was levied in Germany on light bulbs until the end of 1992.

Originally there was a tax on candle wax, but this was “modernised” at the beginning of the 20th Century.

The tax was discontinued as part of measures to harmonise taxes within the EU.

To hear a simple explanation and a short discussion in German, listen to the podcast:

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