Tax filing in
Students either have to pay a small amount as taxes or do not have to pay anything at all. It is important that each and every student file for a tax return so that they can claim for a refund that they are eligible for.
The German financial year runs from the 1st of January to the 31st of December every year. The deadline for filing taxes for the year 2018 is on the 31st of May 2019.
A student can ask for an extension if they are unable to file a tax return on time but you’ll have to pay an amount as a penalty.
Tax Filing In Germany For International Students – Quick Facts
- File your tax returns at the local tax office based on your place of residence in Germany
- The financial year in Germany begins on the 1st of January and ends on the 31st of December
- The last date for filing for taxes in Germany for the tax year of 2018 is on the 31st of May 2019
Doing A Mini-Job Or Minor Occupation
The mini-job rule is applicable for an international student in Germany who has a regular or part-time job but the earnings are not more than 450 Euros per month.
They are exempted from paying taxes to the government and it is not compulsory for them to make contributions towards the state pension.
Pension contributions are made by the employers which the employees can claim at the end of the financial year. Whether an international student does one or several mini-jobs his/her total income should not go above 450 Euros to get a tax exemption.
Earning An Income Above The Allowance In A Minor Occupation
If you are an international student in Germany who earns an income above 450 Euros regularly you require an income tax number. Deductions are made automatically from the wages of the student as taxes and contributions towards pension insurance.
By rule, an international student gets a refund for the amount they’ve paid as taxes in Germany but only if they file for an income tax return to the authorities.
The student insurance is sufficient for a student to remain insured if they work less than 20 hours every week. However, if you are an international student who works more than 20 hours every week you are expected to make contributions towards health insurance, pension insurance, and unemployment insurance.
Tax Filing In Germany For International Students – How Much Do You Have To Pay As Income Tax?
The amount that a person including an international student pays as taxes to the German government depends on his/her income.
- You do not have to pay taxes if your income is only up to 450 Euros each month
- Earnings in Germany are subject to basic tax allowance and your income would not be taxed up to that allowance
- The basic tax allowance for 2019 is 9168 Euros per year if you are single
- The allowance comes up to 18,336 Euros for couples who are in a civil partnership or married
- The rate of taxes vary from 14 % to 42% depending on how much income you earn
- The higher the rate of income that is taxable the higher the rate of taxation would be
- 42% of taxes are applicable only on an amount above 250,731 Euros per year if you are single and 501,462 euros for couples (This doesn’t apply to international students in a normal situation)
Does An International Student Need To Contribute Towards Health Insurance?
In most of the cases, the students do not have to make contributions towards health insurance while having a job in Germany because they are insured as students. However, if the student works more than 20 hours each week they are required to make a contribution towards health insurance.
Contributions Towards Pension Insurance
Everyone who is employed in Germany has to make a contribution of around 9.45% of their earnings towards pension insurance. The amount that all students including the international students have to contribute towards this scheme is low compared to the other people.
This benefit can be enjoyed only if the student earns up to an amount of 850 Euros per month. Any earnings above that amount require the student to contribute the full share which is 9.45%.
Unemployment Insurance Contributions
International students do not have to contribute to unemployment insurance. However, if they lose their job they cannot claim for the benefits of unemployment.
Employment During Term Break Or Holidays
Certain special rules are applicable for international students working during their term break or holidays. Even though the income earned during the term break are taxable most of the students get a tax refund by filing for a tax return at the end of the year.
They also get an exemption from making contributions towards state pension and health insurance if their period of work is only up to 50 working days or up to two months every year.
Doing A Freelance Job Or Self-Employment
An international student who is working as a freelancer is required to sign a contract with the employer or submit an invoice. Even though this income is not taxable the students have to declare all their earnings when they file for a tax return during the closure of a financial year.
An income tax card is not a requirement for students who are self-employed. However, only the international students who are from the EEA and the EU are allowed to be self-employed.
Tax Filing In Germany For International Students – Tax Identification Number (Steuernummer) Or Tax ID (Steueridentifikationsnummer)
For the purpose of taxation in Germany, there are two different numbers, the Steuernummer, and the Steueridentifikationsnummer. If you are a freelancer or for the purpose of filing tax returns you can use the Steuernummer.
The Steueridentifikationsnummer is an Identification Number which is also referred to as the National Identification Numberis a unique identification number. The German Taxation Office issues this number for the purpose of filing tax returns and administering other systems of the German government.
Every international student in Germany requires a Tax ID number to:
- Start a new job
- Change jobs
- Become a freelancer
- Start a German bank account
- File for tax returns
Tax Filing In Germany For International Students – The Process
International students who earn an income in Germany need to file a tax return at the end of a financial year. Usually, the employers deduct the tax amount from the wages given to the employee and transfer it to the tax office.
Besides, they also transfer church tax if you belong to a religious sect, insurance for health, unemployment, and pension, and solidarity charges also get deducted from an employee’s wages.
To get the reimbursement for any tax exemptions you are eligible for, you need to file a tax return at the tax office before the 31st of May 2019.
The process of filing taxes is as follows:
- International students need to collect the forms for tax declaration at the tax office
- Or download the tax declaration form from the website of the tax office
- Fill in all the required details and submit the income tax declaration at the tax office
- Clearly mention the details of your income and all the charges you’ve paid to the government
- Attach the electronic income tax certificate from your employer (This has all the details of the payments made to the government in the form of church taxes, income taxes, solidarity surcharge etc.)
- Attach the details and receipts of expenses you’ve had during the financial year
- Expenses include travel charges, private schemes for pensions, and cost of moving to a new house
- These expenses could get deducted from your taxable income
- The government decides if you are eligible for a refund and you get a refund accordingly
Tax Filing In Germany For International Students – How To File Returns?
Seek The Help Of A Professional
Getting help from an income tax assistance association in Germany or a tax consultant would be of great benefit especially if your details of income and the details of the amount paid to the government are complicated.
Taking a professional help also ensures that you get the maximum benefit by not missing any deductions you could be eligible for.
File The Tax Returns On Your Own
You could also file the tax returns by yourself by filling in the tax declaration paper form and submitting it at the tax office or by filling and submitting the form online.
If you have doubts and questions you can get it cleared at the tax office or on the Elster website. You can send your tax declaration to the tax declaration office using Elster which is an electronic form for filing tax returns.
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