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TAXES

How to request an extension on your tax return in Germany

Taxes for 2023 are due in Germany immediately following the upcoming weekend. However there are a couple of ways to file your return later without incurring any penalty. Here are your options if you need to file later.

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Tax return extensions in Germany can be requested with a written letter delivered to the local tax office. Photo by Scott Graham on Unsplash

Tax returns for 2023 in Germany are due by August 31st. But since that date falls on a weekend, the deadline is extended to the following business day which is Monday September 2nd. 

For most regularly employed workers, filing a tax return (Einkommensteuererklärung) is not mandatory in Germany – although you may want to submit so that you can take advantage of any deductions you’re entitled to.

But if you have extra sources of income, are self-employed or a freelancer, or have multiple jobs, then you’re obligated to file.

In this case it’s important that you file by the tax deadline (Steuerfrist), or else you could incur penalties such as late fees.

If there’s no way you can file your taxes by Monday, here are a couple ways to extend that deadline.

READ ALSO: The 2024 deadlines to submit your tax return

Request a tax return extension

The most direct way to receive an extension on your tax deadline is simply to request one from the tax office (Finanzamt). 

This can be done with a written letter delivered to your local Finanzamt branch, but note that the office needs to receive the letter ahead of the deadline on September 2nd. So if you’re planning to request an extension for this year, you’ll want to get that letter in the mail immediately. (You can search for your local tax office’s contact information here).

If you’re really up against the headline, you may also be able to fax in your letter or hand deliver it to ensure it gets to the tax office on time. Some offices will even accept this letter by email, but not all of them do so it’s best to double check with your local branch if this is possible.

There is not a specific form for requesting a tax extension – you’ll simply want to construct a semi-formal letter (in German language) with your name and address that explains why you can’t meet the deadline and asks for an extension of up to four months.

The tax office ultimately has discretion to grant you an extension or not. But it’s generally understood that people who have filed on time previously, and those with understandable explanations and shorter extension requests are more likely to be granted.

Valid reasons to request an extension could include hospitalisation, the death of a close relative, a prolonged stay abroad, missing documents, a move, or occupational stress, for example.

Additionally, you’re advised to include a line noting that if you don’t hear back, you’ll assume the extension has been granted. Here’s an example of a German sentence saying this: Falls ich von Ihnen nichts Gegenteiliges höre, gehe ich von der Genehmigung meines Antrags auf Fristverlängerung aus.

For a sample letter template, see this article on Steuerbot’s website.

READ ALSO: The best apps to help you track your German taxes

Get a tax advisor

Another useful tip is that people who plan to file their taxes with the help of a tax advisor, as well as members of tax assistance associations, automatically have significantly longer tax return deadlines – generally until the end of May in the following year.

If you’ve made an agreement to file with a tax advisor, they can notify the Finanzamt on your behalf, and then you’ll have until the extended deadline next year to ensure that you file with them.

Even if you’ve missed the deadline and receive a letter notifying you that you are late to file, you still may be able to file later with a tax advisor without penalty. But you’ll need to act quickly to ensure that an advisor contacts them about your case before penalties pile up.

If you miss the deadline completely for the first time, you may expect a penalty of at least €25 per month or anywhere between €100 and €500, depending on your income and how cooperative you are with the relevant authorities. But larger fines are possible – up to a whopping €25,000.

This is one of those German cases where ignoring letters in the mail could cost you significantly. 

Best to go ahead and file now or get in touch with a tax advisor if need be.

READ ALSO: What happens if you miss your tax return deadline in Germany?

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TAXES

Do employees in Germany have to declare tax on a side job?

If you're in regular employment and work some extra hours at another workplace on the side or in a freelance capacity, you may be wondering how it works when it comes to tax.

Do employees in Germany have to declare tax on a side job?

The tax return deadline for 2023 in Germany is coming up on September 2nd. Filing a tax return (Einkommensteuererklärung) is mandatory for people who are self-employed or freelance. 

Declaring tax is not an obligation for most regularly employed workers, although many people do so they can take advantage of deductions. 

READ ALSO: The top tax deductions often overlooked by employees in Germany

However, people in employment with a side hustle – such as freelance work – or other sources of income do have to file a tax return. 

Whether you’re in this position already, or you’re thinking about taking on a side hustle along with your main employment in future, we spoke to a specialist to find out the tax rules. 

How is it taxed?

So you will have to fill out a tax declaration to declare extra income you earn – but how much tax will you face?

It can be a significant hit, at least in terms of tax you might have to pay back after filing your declaration. 

The income from your main job is taxed according to the rules of Tax Classes 1-5. Which one you belong to depends on your situation such as whether you’re single, married or have children. In these Tax Classes, a portion of your income – €10.908 in 2023 – is not subject to tax.

Taxes on a second job fall into a special category known as Tax Class 6 – where there is no tax free basic allowance.

READ ALSO: Can I have a freelance gig as an employee in Germany?

Munich-based tax advisor Thomas Zitzelsberger told The Local: “Such extra freelance income is treated in exactly the same way as if you got a pay rise on your normal salary or a bonus.

“The tax rate depends on how much you make already and what your tax rate is already. So, if you are making €60,000 plus per annum as a single person in Tax Class 1, then your pay raise, your bonus or your extra freelance income is taxed at the top tax rate.”

But there are ways to reduce the amount you have to pay to the tax man.

“The good news is you can claim expenses related to your freelance income,” said Zitzelsberger.

That means you can offset the tax owed with any expenses you incurred, like if you bought equipment for the job, for example. 

READ ALSO: The 2024 deadlines to submit your tax return

What if it’s a mini-job?

If you’ve lived in Germany a while, you’re no doubt familiar with the concept of ‘mini-jobs’.

Introduced in 2002 as a way for employers to bring on part-time workers more easily, they have certain rules along with tax exemptions.

Workers can’t earn more that €538 per month from their mini-job. If you take on work on the side that is classed as a mini-job then you won’t face a tax bill.

Regarding mini-jobs “the employer pays the tax in the background and you have no deductions”, said Zitzelsberger. “Your net is your gross.”

But if it isn’t a mini-job, there’s no way round it. Even if you earn, for example €500 in a year – you’ll be paying full tax on it. 

“If a side job is not a mini-job, it is taxed in Tax Class 6, no matter what the amount is,” said Zitzelsberger.

For this reason, it is worth checking before you sign a contract or do work for an employer on the side to ask if it is a mini-job or can be classed as one. 

Please be aware that this article is general advice and you should seek out a specialist for individual queries. 

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