Seven ways to pay less tax in Germany

Doing your tax return in Germany can be a famously complex process. The German tax authorities don't always make things easy for English speakers either.

Seven ways to pay less tax in Germany
Photo: Getty Images

However, forewarned is forearmed. Not only can knowing what can be claimed help you to prepare, it can also lead to a substantially lower tax bill. Together with tax expert Lars Weber, from Taxfix, The Local investigates some of the costs you can claim in Germany that you might not know about as an international resident.

Make the process of filing your German taxes a breeze with Taxfix and receive a 50 percent discount by using the code ‘TX_TheLocal50’

1. Childcare

If you’ve got young children, you’re able to claim their childcare costs as a deductible on your tax return. As Weber tells us: “Many expats don’t know that you can claim these childcare fees, you simply need to have a record of payment somewhere safe, that you can show if your local tax office wants to see your records.”  

2. Home office 

Starting in late 2020, the Jahressteuergesetz 2020  (Annual Tax Act 2020) allows employees to claim up to €600 for both last year, and the following tax year, as home office expenses. This is known as the Home Office Pauschale  (‘Home Office Flatrate’). If you’ve been forced to set up a desk and laptop in a corner of your living room to work over the past year or so, you should be sure to claim this expense. 

3. Job education and training 

“If you need further training for your job, and that training is conducted in German, you should claim any associated costs on your tax return,” says Weber. So, if you’ve been sent off to another city to do a course, especially overnight, be sure to keep your receipts, whether they be for hotels, petrol, or any other reasonable costs. If you’re paying for this training out of your own pocket, you should be especially sure to keep your receipts for tax time. 

On the web, iOS or Android – Taxfix is the fast, simple way to claim an average of €1,051. Use the code ‘TX_TheLocal50’ for a 50 percent discount

Photo: LinkedIn/Lars Webe

4. Professional memberships 

Similarly, if you’re obliged to be a member of a German professional organization as part of your work, membership costs and other costs associated with maintaining your membership can and should be claimed. This is not solely restricted to those who require a licence or certification to do their job – if it’s an expectation that you should be a member of an organisation in your professional field, then you should consider these a deduction. 

5. School fees

If you have a family, it’s not just childcare costs you should consider. “If you’ve got school-aged children who are attending a private or international school, then their school fees can be claimed as a deduction,” Weber says. As always, be sure to keep full records, as if the Finanzamt  (‘Finance Office’ for your region) come calling, they’ll want to see them in their entirety, for the year in question. 

6. Workroom 

While everyone who has been forced to work from home by the pandemic can claim the Home Office Pauschale of €600, those who have an entire room in their home dedicated to work can claim up to €1,200 in outfitting costs. “You can even claim the cost of curtains, if you can provide the receipts.” Having a room solely dedicated to work can also lead to further deductions, such as power and internet costs, if you can prove that those costs were incurred in the course of your job.

Be careful however. As Weber warns: “Your local Finanzamt can be very strict in what is considered a workroom, and may come asking questions. Be sure that it is a distinct and separate room to your living area, and somewhere you’re not spending a lot of time outside work.”

7. The simple, fast tax solution

“If you’re using Taxfix to lodge your return, you shouldn’t worry about claiming things on your tax return”, says Weber. This is because Taxfix is specifically designed with a question flow that guides you to answer only the questions that are required for your unique personal circumstances.

Everything is in simple, clear English, and your return can be completed in roughly 22 minutes. If your return is under €50, there is no cost, and if it’s over, you play a flat rate of €39.99. Best of all, users usually receive around €1,051 back – more money to enjoy Germany with! 

Wherever you are, use Taxfix to lodge your return in just 22 minutes. Use the code ‘TX_TheLocal50’ to receive a 50 percent discount

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Living in Germany: Wine princesses, Holstein cows and will we really see less bureaucracy?

In this week's roundup, we talk about plans to modernise Germany, German signage, wine princesses and world-famous Holstein cows.

Living in Germany: Wine princesses, Holstein cows and will we really see less bureaucracy?

Living in Germany is our weekly look at some of the news and talking points in Germany that you might not have heard about. Members can receive it directly to their inbox on Saturday.

Chancellor vows to speed up digitalisation and modernise Germany. Will it really happen?

It’s long been one of the more annoying parts of living in Germany. Whether it’s registering or getting a driver’s licence, many services seemingly cannot be done online. However, this week Chancellor Olaf Scholz said that Germany would take the digital route seriously. As part of a new drive, dubbed the ‘Deutschland-Pakt’, the government wants to modernise the country. As we reported, Scholz vowed that public authorities and offices would further digitalise their systems. By the end of 2024, he said services like applications for a new driving licence or identity card, or for parental allowance (Elterngeld) and unemployment benefits (Bürgergeld), would be possible either partially or fully online, according to the new plan.

Another part of the ‘modernise Germany plan’ involves attracting foreign talent from abroad. Scholz said that 13 million workers would retire by the middle of the next decade, leaving a gaping hole in the workforce unless more people are sought. He appealed for the Skilled Workers Immigration Act – set to go into effect in stages from November this year, but with the bulk of it from March 2024 – to be implemented right away. Scholz said the shortage of employees was a major source of worry for companies in Germany. The Chancellor, who was sporting an eye patch during his Bundestag speech due to a jogging accident, said that he wants to make the country more attractive to people from abroad by speeding up immigration procedures and minimising bureaucracy. Less bureaucracy in Germany? We’ll believe it when we see it (but, man, we do really want to see it!)

Tweet of the week

Apparently these excessive ‘mind the step’ notices are an art project. But to be honest, we’d rather have this than the lack of signage you often find in Germany. 

Where is this?

'Wine princesses' at Rödelsee.

Photo: picture alliance/dpa | Heiko Becker

We have talked about Germany’s love of dubbing women ‘queens’ depending on the season. There’s the Spargelkönigin or asparagus queen and the Erdbeerkönigin, the strawberry queen. Now meet the Weinprinzessinnen! The wine princess pictured here on the left is Anna from Rödelsee in Bavaria. She’s cutting the first grapes from a vine in the area with Agriculture Minister Michaela Kaniber of the CSU, the Bavarian sister party of the Christian Democrats.  

Did you know?

Many people are not so familiar with the northern German state of Schleswig-Holstein. But it’s well worth visiting, as Sarah Magill writes. One thing you might not know is that this state has its own cow named after it. Yes, those cows with the white fur and black patches are the Holstein-breed – named after Schleswig-Holstein.  The breed originated in the Netherlands, specifically in the province of Friesland and the region of North Holland. The breed was then named after the province of Holstein in Germany, where some early Dutch Holsteins were imported.

Adding to their charm is that the Holstein cows are renowned for their exceptional milk-producing capabilities: a single Holstein cow can produce thousands of gallons of milk in a year, making them a popular choice for dairy farming.