Frequently asked questions
Can it be beneficial for me to file a tax return?
It might be possible that you are not obliged to file a German income tax return due to the type of income you are obtaining. In a lot of cases, it can however be beneficial if an income tax return is filed voluntarily. These are - amongst others - the following:
- Income from investments in case the saver’s allowance is not fully used
- Spouses/registered partners with tax class IV/IV
- Job change during the current year
- Riester pension
- Childcare costs
- Severance payments
- Distance between home and workplace of 15km and more
- Extraordinary expenses (“außergewöhnliche Belastungen”), e.g. medicines, doctor’s fees
- Marriage or registered partnership
- Move for professional reasons
- Other costs in connection with the job, if exceeding the employee’s standard allowance
This list is not complete. In the course of an informal initial conversation, we are happy to review whether the filing of an income tax return could be advantageous for you.
Do I have to make an appointment in advance?
If you merely would like to hand in documents, an appointment is not necessary. Just stop by during our office hours (Monday to Thursday 9.00 to 17.00 and Friday 9.00 to 14.00). In case you would like to visit for a consultation, please call us to make an appointment in advance. You can of course also contact us via e-mail or regular mail.
Can I hand in my documents electronically?
Of course you can provide us with softcopies of your documents via e-mail or USB stick. Depending on the amount of documents, it might be more practical to hand in hard copies. In addition, it is especially for individual income tax cases necessary to file certain original documents and receipts together with the income tax returns.
How does the tax office receive my tax return?
Generally, tax returns are submitted to the tax authorities electronically by us. In addition, your approval to the returns and consent to the electronic transmission is required.
Which tax class should I choose?
Married couples and registered partners often raise the question whether they should choose the tax class combination IV/IV or III/V. In addition, there is the possibility to opt for the factor method (“Faktorverfahren”).
The tax classes IV/IV are basically chosen by couples who have a similar income level whereas the tax class combination III/V is more appropriate for couples with higher income differences. The factor method in connection with the tax class combination IV/IV allows for a wage tax deduction which is adjusted as closely as possible to the actual income situation.
If couples opt for the tax class combination III/V or for the factor method, filing of an income tax return will be mandatory.
How long does it take until taxes are assessed by the authorities?
Unfortunately, we do not have any influence on the processing time at the tax office. From our experience it is usually to be expected that the processing can take up to six months. In less complex cases it might take less time, approximately between six weeks and three months until the tax office will issue the respective tax assessment notice.
How is income from investments being taxed?
German banks are obliged to withhold taxes at a rate of 25% plus solidarity surcharge and - where applicable - church tax on your capital yields which exceed the respective exemption order.
As far as private investors are concerned, this is basically a flat-rate, definitive withholding tax, which means that private investment income does not need to be declared in your income tax return. It can, however, be beneficial for you include this income in your annual tax return. This holds particularly true for cases where the individual tax rate is below the withholding tax rate or where the saver’s allowance (“Sparerpauschbetrag”) stated in the exemption order has not been fully used.
What is a permanent extension for VAT purposes?
Basically, monthly preliminary VAT returns need to be filed and the resulting VAT amounts to be paid by the 10th of the following months. Upon application, tax authorities will extend that deadline by one month. I.e. the preliminary tax return for February can be filed by 10 April (instead of 10 March), the return for March by 10 May etc. For the extension of the deadline the tax payer needs to pay a special advance payment amounting to 1/11 of the total VAT liability of the previous year. Of course, this special advance payment will be credited by end of the current year.
How much does tax advice cost?
As tax advisors we are bound by the Official Fee Schedule for Certified Tax Advisors (“Steuerberatervergütungsverordnung”, StBVV). This fee schedule provides for value fees for particular services, such as the preparation of individual and business tax returns and financial statements. The amount of the value fee follows certain parameters like income, revenue and balance sheet total.
Other services like personal consultations are invoiced with a time fee, i.e. on a time-spent basis. In addition there is the possibility to agree on lump-sum fees for certain services.
For more transparency and planning security, we are happy to prepare a proposal for you.
The information contained and accessed on this site is provided for general guidance and is intended to offer the user general information of interest. The information provided is not intended to replace or serve as substitute for any tax or other professional advice, consultation or service. You should consult with a professional in the respective tax or other professional area to obtain such services.