Germany: Living There - Tax Issues

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Living There

The same tax system applies (refer to discussion above) to residents and non-residents except for various tax allowances and filing options e.g. joint returns. German tax residents who have unlimited tax liability, are eligible to claim standard annual deductions and allowances.

Allowances

Each resident tax payer is granted a basic allowance, currently DM7,664 (€3,919). The basic allowance for a married couple filing their tax returns jointly is DM15,329 (€7,838).

For every dependent child of the taxpayer, he can avail of the following deductions:

• a child deduction of DM1,824 or €933 (DM3,648 or €1,865 for married couples)
• a deduction for childcare, upbringing and education of DM1,080 or €552 (DM2,160 or €1,104 for married couples)

A single person who is a head of a one-parent family may deduct an additional amount of €1,308 per year if at least one child, for whom he is entitled to the above child benefits/deductions, lives in his household. The deduction is generally not available if another adult lives in the taxpayer's household.

Foreign income taxes that do not qualify for foreign tax credit treatment or where a deduction instead of tax credit has been applied for.

Church Tax

For resident individuals belonging to the Roman Catholic Church, German Protestant-Lutheran Church, Reformed Church or Jewish parishes, a Church Tax of 8-9% is also imposed.

Germany - more data and information

• Lawyers (attorneys) with property law practices in Germany

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