The Essentials in a Nutshell
- Most people do no have to submit a Tax Return as a Student in Germany
- There are certain cases where Filing a Tax Return becomes mandatory, like doing two jobs at a time, not being in Tax Class 1 or Tax Class 4/4 Combination among others.
- As a student you can put all of your study related expenses in a Tax Return
How to proceed
- Figure out if you are obliged to submit a tax return or not by checking your tax class
- Start writing down all the expenses you have as a student
- Submit a tax return (Elster, wundertax*, Tax Consultant)
Tax Returns as a student in Germany is a very interesting topic. It can lead to hundreds of Euros being returned to you based on your expenses as a Student in Germany. Many students however, avoid this topic thinking that it’s a headache. Trust me, it’s not a very difficult topic.
If you spend just a couple of minutes every year you can get an average of 1000 Euro tax return every year. For students, the tax refund can be in multiples of thousands based on your expenses.
Who must submit a tax return in Germany?
In most cases students are not obliged to submit a tax return. Because students tend to be in tax class 1 and usually only have 1 job at a time. But if you are someone who is not in tax class 1 or have had multiple jobs at a time you might be obliged to submit a tax return.
Not sure if you are obliged to submit a tax return? Learn more in my guide on Personal Finance for Students in Germany.
Tax Return Deadlines in Germany
For mandatory filers there is a deadline each year. The deadline is usually the 31st of July of the following year. But there are no deadlines for voluntary filing. This is a great advantage for students. Because you can submit a tax return up to 4 years in the past.
So in 2023 you can submit a tax return for 2022, 2021,2020 and 2019. On top of this you can carry forward losses from 7 years in the past.
Basics about Tax Returns in Germany
Before I share what can be declared and what not. We need to discuss a few other things.
Basic Tax Free Allowance
As an employee in Germany, when you get an income you also have to pay taxes on this income. For low-income earners, there is a tax-free limit called the “Grundfreibetrag” or basic allowance.
The limit is varied each year. This amount is tax-free for each and every employee in Germany. Any income above this limit is taxed based on your tax class.
Progressive income tax in Germany
Germany has a progressive income tax level. This means that you can be taxed between 14 to 42%. But this tax only applies for an income that is above the basic allowance.
|German income tax range||German tax rate|
|Up to €9,984||0%|
|€277,826 and above||45%|
Block Account Amount IS the Basic Tax Free Allowance
This basic allowance is what the Government thinks is the least amount an individual needs to live in Germany. You might also know it as the amount you need to block each year if you are a Non-EU international student.
As taxes need to be paid on incomes above this basic allowance, any expenses related to your job or studies can be shown in a tax return to reduce your tax burden.
This is what Tax Return as Student in Germany means
Let me explain tax returns and tax burden with the help of an example.
Lets assume someone is earning €45,000 per year as a full-time employee. Using a tax calculator we can see that the income tax for this person is going to be €6,747 per year. If this person has work-related or study-related expenses, this person can present their data and the actual figures for their income and costs to the tax office.
With the help of the submitted tax return, the tax office can then determine the actual tax burden of the taxpayer and check whether a refund of income tax is due or whether an additional payment is due.
Reduction of Tax Burden
Let’s say this person has €5,000 worth of expenses. And they submit a tax return showing these expenses. The tax office will not simply give them €5,000 bank. That’s not how things work.
The tax office will calculate that this person is earning €45,000 per year and has work-related expenses of €5,000 each year. So the income tax should be calculated as if this person was earning €40,000.
Now based on the new calculation, this person should pay an income tax of €5,445 instead of €6,747 based on the €45,000 income. As a result, the tax refund will be €1,302 and not the €5,000 work-related expenses.
Social Contributions are not Taxes
Remember Social Contributions like pension insurance, health insurance , and care insurance are not taxes. Only Solidarity surcharge, Income tax and church tax are considered as taxes.
People who specifically do mini jobs are exempt from paying pension and care insurance. Almost everyone else has to pay social contributions as there ARE some special cases.
You dont have to Pay Taxes to file a Tax Return
Here you might say Ahsan, I am a student and I dont earn such a large amount or maybe I dont even make a single cent as a student.
To that I will say, even if you do not earn a single cent. You can submit a tax return showing all of your studies and work-related expenses to get benefits from the tax office.
If you have paid enough taxes that year, you will get a tax return. If you haven’t payed enough taxes or no taxes at all, you will get a tax loss carry forward statement or a verlustvortrag from the tax.
The tax loss carry forward statement shows that you have incurred losses in the previous year and these losses will be adjusted in the current years tax burden.
Example: Tax Return for students in Germany
Let me give you another example. Lets assume you were a student in 2021 and did not pay any taxes. Because you earned between €0 up till the tax free limit. And in your tax return you shared study related expenses of €3,000.
As you did not pay any taxes the tax office cannot reduce your tax burden. To remedy this the tax office will issue a tax loss carry forward statement.
Lets say In 2022 you still remained under the tax free income limit. When you submit a tax return for 2022, you can show:
- Your income
- Study related expense
- Work related expense
- Previous tax loss carry forward statement
As you did not pay any taxes in 2022 you will get another tax loss carry forward statement. As a student you can carry forward losses for up to 7 year. Ideally you should be working and paying taxes in 7 years.
Work and Study Related Expenses for Students in Germany
As a student in Germany you can claim the following expenses in a tax return
Any fee that is associated with your education is fully tax deductable, like your semester fee, University registration fee and examination fee among others.
Any cost associated with going from your house to the university is tax deductable upto 30cents per kilometer (but this is paid only 1 way). Trips to seminars, library and other study events are also considered.
Literature and other tools:
Specialist literature, equipment, printing and copying costs, pens, pads, can be claimed in this category.
Telephone and Internet costs:
Smartphone contract, internet at home and landline costs belong to this category
Hardware devices like a mobile phone, Computer, tablet, software and peripherals can also be claimed if they are proven to be used for study purposes.
If you have a primary accomodation in one city and you keep a secondary location in another city for study purposes, the accomodation costs of the secondary residence can also be claimed as a study expense. Thats said its pretty rare having multiple residences as an International Student in Germany.
If you move cities for internship or thesis you can take advantage of the Relocations cost of upto 820€ as an individual
If you have student loans, you can claim the interest payments as a burden and put it in your tax return but you cannot put the loan itself as a tax burden.
As a student one of the biggest headaches is first seaching for internships and thesis and later on full time jobs, thank fully you can put these costs in your tax return. If you submit an application using regular post, 8.5€ can be claimed per physical post. For online applications 2.5€ per application can be claimed.
There are Meals flat rate for internships, semesters abroad and excursions. These vary but for domestic trips the flat rates are 12 euros/8 hours and 24 euros/24 hours
Additionally you can also claim realized losses from your investments but those vary depending on the investment type.
There are many other claimable expenses which I am sure I have forgotten. Maybe you can write them in the comments below to let me know.
An important thing is to keep proof of things whenever possible, this will help you manage expenses and assist you later on when you are applying for a tax return
How to Submit a Tax Return as a Student in Germany?
There are 3 main ways to submit a Tax return in Germany. It does not matter whether you are a Student or have any other status.
The are many options available
- Elster (official Program by the Govenment)
- Tax Consultant (often very expensive and mostly used by professionals)
- Tax Aid Associations (also mostly used for complicated tax situations)
- Online platforms (wundertax*)
- Softwares (Wiseo, Quick Steuer etc)
- Submitting manual papers (due to covid it might not be available in many Cities)
Choosing a platform depends on the complexity of the taxes. In most cases it is better for students to go for Online platforms which cost 29€ onwards.
One can go for Elster but it is in German language and is too complicated even for German nationals (it is free though).
Frequently Asked Questions:
Q1. As a student do I have to submit a tax return?
Well, you don’t have to submit a tax return if you had just 1 job at a time and your tax class always remained as tax class 1, but it might be worth it if you submit a voluntary tax return as a student in Germany.
Q2. If I ever voluntarily submit a tax return, do I have to submit one every year?
Nope, you do not have to submit a tax return each year voluntarily.
Q3. I am a student in Germany for a couple of years and I have never submitted a tax return. Therefore I should submit a tax return or just do it when I start a job?
Well, it depends on many factors as I have discussed in this article.
In a video I made 2 years ago, I had an opinion that students should finish 1 year as full-time employees before submitting a tax return. Even though that opinion is still ok, I now think that students should submit a tax return each year.
The main reason for this change of opinion is that we tend to forget things quite easily, and that is why in order to take full advantage of filing a tax return as a student in Germany you should submit one as soon as you can. In this video I share step by step process of how to submit a tax return.
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Disclaimer: None of the content in this article is meant to be considered as investment advice, as I am not a financial expert and am only sharing my experience with stock investing. The information is based on my own research and is only accurate at the time of posting this article but may not be accurate at the time you are reading it.