Late tax return in Germany: Is it possible?

The tax return deadline for 2019 has already passed. But that doesn’t mean it’s too late to get a refund for any tax you’ve overpaid. Online tax service Taxando explains how tax returns work in Germany, and in which circumstances a late tax return is possible. 

Anyone who has worked in Germany and paid tax on their wages (Lohnsteuer) can apply for a refund of overpaid tax. 

You are obliged to submit a tax return if any of the following apply to you. We then speak of a “statutory settlement obligation”:

• You have been assigned a tax number (Steuernummer)
• You have a so-called Steuerfreibetrag assigned by the Treasury Office
• You have been awarded third or sixth tax class (Steuerklasse 3 or 6)
• You carry out registered business activities in Germany (Gewerbe)
• You are retired
• You receive state benefits

If none of the above apply to you, you are not required to submit a declaration. However, the tax office (Finanzamt) may call for a settlement from a person who does not have a statutory settlement obligation. In this case, settlement is also obligatory. As of 2014, people who have already made payments in previous years are also required to settle their accounts on a regular basis. 

The tax settlement date for 2019 was July 31, 2020. Failure to meet this deadline may result in fines charged by the German tax office. However, if you engage the services of a tax advisor, the deadline is automatically extended (see below).  

Documents required for settling your taxes in Germany

In order to settle your taxes, you must have a tax card (Lohnsteuerbescheingung), which is issued each year by your employer after December 31, or your monthly pay stubs (Abrechnung) for the last working month for each employer in the tax year.  

Joint and individual settlements

The size of the refund you receive depends on how much you earned and how much tax you paid. However, it should not be confused with the amount of tax deducted by your employer off your payslips. While people on lower incomes (around 10.000 euros or less annually) can almost always expect a 100 percent refund, a full refund is not possible for people with higher incomes. 

Individual settlements

Individual taxation applies to a single taxpayer (someone who is single or unmarried, a widower, a divorcee or a person who is married but does not meet the criteria for joint taxation). 

Joint settlements

Joint settlement takes place when your spouse and their income are included in your settlement. From the moment they enter the European Union, foreign citizens are entitled to joint tax settlements with their spouses. This is a positive change, especially for people on higher incomes. 

Your spouse does not need to be registered in Germany. It also does not matter whether you settle their accounts abroad together or separately. Your joint income outside Germany should not exceed the tax-free amount. Income obtained in other countries in a given tax year also affects the amount of tax payable in Germany.

Tax deductions

At the same time, in the case of both individual and joint settlements, it’s important to keep in mind write-offs that may reduce the amount of tax due. Some things you may be able to deduct include bills for accommodation, apartment rental, bus or coach tickets, internet, mobile phone contracts and commuting expenses. 

Refunds are not guaranteed

When settling your taxes, it’s important to bear in mind that you will not necessarily get a refund. In some circumstances, the settlement may actually end with you having to pay more money to the tax office. 

Receiving a decision from the tax office

On average, the waiting time for a return is between three and six months. The deadline is conventional and the tax office has no time limit for considering the submitted declaration.

When the time comes, the tax office will send a decision to the taxpayer’s address. Any tax refund is then transferred to the account number you provided when submitting your documents. The transfer is made in euros, unless the taxpayer provided a foreign currency account, in which case the amount of the refund will be converted.

Is a late settlement possible?

Late settlements are certainly possible. If you engage the services of a tax advisor, they are permitted to submit a declaration on your behalf as late as February the following year. For example, for 2019, the settlement date, if using a tax advisor, would be February, 2021. 

There are a number of tax advisors out there, and an increasing number of online services that can guide you through the whole process, from filling to submission. Some of them even offer services in foreign languages.

How big of a refund can you count on?

The amount varies according to your income and the deductions you make. The average refund is 1.070 euros, while the record breakers get back up to 30.000 euros. Remember, however, that the tax settlement does not always end with a refund of the overpayment. It may be that you have to pay extra tax in Germany. 

Missed the tax declaration deadline? Engage the services of Taxando, a useful tax return app available in English, Polish, Russian and German. Their experienced tax advisors will ensure the correctness of your application and then take over all contact with the tax office on your behalf. The Taxando app is available on Google Play and the App Store.