Tax Return in Germany 2026 – Essential Guide for Expats

Filing Taxes in Germany

Filing taxes is probably something that most people don’t look forward to. However, it’s often beneficial: many employees in Germany receive a tax refund each year. According to the latest Destatis income tax statistics, the average refund for employees was around €1,240 per filed return. This money is yours, and without a tax declaration, it would stay with the government. Here’s everything you need to know about income tax returns.

If a Steuerberater or Lohnsteuerhilfeverein prepares your 2025 return, the deadline is extended to March 1, 2027, because February 28, 2027 falls on a Sunday.
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Why do you need a tax return?

A tax return helps determine if the taxes you’ve paid during the tax year align with your actual tax liability. If you overpaid, you get a tax refund. If you underpaid, you’ll need to pay the difference. In Germany, it’s less common for most employees to underpay. Your actual tax liability can differ from the taxes you’ve paid due to expenses during the year that can reduce your taxable income. Tax deductions can include work-related expenses, church taxes, and insurance contributions, all of which can decrease your tax bill.

Besides employees and the self-employed, pensioners are also often required to submit a tax return. Nearly five million pensioners receive pensions high enough to necessitate a tax declaration. Fortunately, many employees can manage their tax returns independently. As data tends to remain consistent year-to-year, the initial tax filing might demand more effort. However, in the following years, much of the information can be reused with minor adjustments.

In which cases is a tax return necessary and useful?

Approximately 50% of all taxpayers need to submit a tax return in Germany. If you’re an employee, the payroll tax gets deducted from your monthly salary. Technically, you might not have to file a tax return. However, many find it beneficial to do so.

According to Section 46 of the Income Tax Act, you must file an income tax return if there’s an income tax allowance on your tax card. However, this rule doesn’t apply if the allowance is a lump sum for disabled individuals or survivors.

For the 2025 tax year, the basic tax-free allowance is €12,096 for individuals and €24,192 for married couples with combined taxation. For the 2026 tax year, it rises to €12,348 for individuals and €24,696 for married couples. If your taxable income is below the relevant basic allowance, you usually do not pay income tax. However, this does not automatically mean you never need to file, because filing obligations can still arise from other income, wage replacement benefits, tax classes, or self-employment.

If you are required to file a German tax return for the 2025 tax year and you prepare it yourself, the deadline is July 31, 2026. Since this deadline is only 30 days away as of July 1, 2026, expats who still need to file should start gathering documents now.

If you get wage replacement benefits such as unemployment benefits, short-time work allowances, parental allowance, or sick pay above the relevant threshold, you may have to submit a tax declaration because these benefits can affect your tax rate through the progression clause. Those in tax class 5 are also usually required to file. Similarly, if you’ve received a severance package during the assessment period, you’ll need to submit a tax return.

Any self-employed person, tradesperson, farmer, landlord, or pensioner with an income surpassing the standard tax allowance should also file a tax return in Germany.

Even if you’re not mandated to file a tax declaration, it’s often beneficial to do so. Employees who file a tax return voluntarily can get a tax refund they didn’t anticipate, especially if they have considerable work-related expenses. For instance, commuting costs can be a factor. Every employee receives a lump sum for work-related expenses, known as the Arbeitnehmer-Pauschbetrag or Werbungskostenpauschale. This has been €1,230 per year since 2023 and also applies for 2024, 2025, and 2026. However, this might not be enough for many people. Special expenses like paid church taxes, social security expenditures, retirement contributions, donations, or childcare costs can be deducted. These often result in a lowered tax liability and a tax refund.

Remember, the expenses mentioned here are just a few examples. There are other costs incurred throughout the year that you might be able to include in your German tax return.

Do I Need to File a German Tax Return?

Use this simple check as a starting point:

If you are unsure, check your situation in ELSTER or ask a tax advisor or Lohnsteuerhilfeverein.

Types of tax returns in Germany

While many associate the term “tax return” primarily with income tax, there are other types of tax returns taxpayers must be aware of.

For instance, an inheritance tax return is often required when the tax office learns of an inheritance. Similarly, a gift tax return becomes applicable when assets are transferred while you’re alive. Business owners must submit a trade tax return; if a business operates as a corporation, a cooperative, or an association, a corporate tax return is necessary. Furthermore, entrepreneurs might need to file a sales tax return if their goods or services are subject to VAT.

How to file a tax return with ELSTER?

ELSTER stands for “Electronic Tax Return”. It’s a digital platform for submitting tax returns to the tax office in Germany. To ensure the safe transmission of data, a certificate is needed, which can be obtained through the registration process. You can set this up by creating an account at ELSTER.

On the website, using the MeinELSTER form, you can submit your tax return online. If you haven’t yet registered with MeinELSTER, we recommend you to do so to make your future tax filing easier. The ELSTER system is useful but can feel difficult for expats because it is mainly built around German tax terminology. Once you’ve input your data for a tax year, most of it can be reused in the next years. If there are updates, the system will provide a reference to your tax return from the previous year, serving as a helpful guide.

English-language tax apps and tax software can be easier for many expats, especially if you only have employment income, relocation expenses, commuting costs, or simple freelance income. However, complex cases such as foreign income, investments, double taxation, rental income, or business activity should usually be checked with a qualified tax professional.

Filing Options for Expats

Tax return forms

A German tax return is composed of a main form that every taxpayer needs to complete. Along with this, there are different attachments that should be filled out if you have incurred related expenses. In ELSTER, these attachments are called Anlagen, not “appendices.” Expats searching inside the portal should therefore look for names such as Anlage N, Anlage S, or Anlage V.

Attachments to the tax return include:

• Anlage EÜR (income surplus statement) for freelancers and self-employed people using Einnahmenüberschussrechnung
• Anlage G (Annex/Form G) for traders and business income
• Anlage Kind (Annex/Form Child) for child-related tax details
• Anlage N (Annex/Form N) for employees
• Anlage R (Annex/Form R) for pensioners
• Anlage S (Annex/Form S) for self-employed professionals and freelancers
• Anlage Sonderausgaben for special expenses such as donations, church tax, and some insurance-related items
• Anlage V (Annex/Form V) for rental income

Tax return filing deadline

The tax returns for the previous year must usually be submitted by July 31 of the following year if you are required to file and prepare the tax return yourself. For expats filing in 2026, the most important date is July 31, 2026: this is the regular self-filing deadline for the 2025 tax year. If you miss a mandatory filing deadline, the tax office may charge late-filing penalties, estimate your tax liability, or request additional action.

For the 2025 tax year, the regular self-filed deadline is July 31, 2026. If a tax advisor or Lohnsteuerhilfeverein prepares the return, the advised deadline is March 1, 2027, because February 28, 2027 falls on a Sunday.

For the 2026 tax year, the regular self-filed deadline is July 31, 2027. If a tax advisor or Lohnsteuerhilfeverein prepares the return, the advised deadline is February 29, 2028.

After submitting your German tax return, expect 2–6 months to receive a tax assessment. Processing times vary by tax office, city, tax year, and complexity of the return.

If the deadline cannot be met, you can request an extension from the local tax office. This request has to be in writing, explaining the reason for the delay and suggesting a new submission date. However, receiving an extension from the tax office isn’t guaranteed.

If you are filing voluntarily, you generally have four years. For example, a voluntary tax return for the 2025 tax year can usually be submitted until December 31, 2029.

Tax Deductions Expats Should Check

Expats in Germany often miss deductions because they are unfamiliar with the German tax system. These costs are not automatically accepted in every case, but they are worth checking when preparing your return.

Common expat-relevant deductions include:

• Commuting costs: Trips between your home and first workplace can be claimed through the commuting allowance.
• Double household expenses: If you maintain a second home for work reasons, costs such as rent, travel, and household setup may be deductible.
• German language courses: These may be deductible if they are clearly connected to your job, professional integration, or work requirements.
• Home office costs: Home office expenses may be deductible if you meet the tax conditions.
• Professional costs: Job application costs, professional memberships, work equipment, laptops, training, and specialist books can often be relevant.
• Relocation costs: Moving costs may be deductible if your move was mainly work-related. In some cases, the relocation lump sum (Umzugskostenpauschale) may apply.

For expats, these deductions can make the difference between a small refund and a much larger one. Keep invoices, rental documents, employer letters, travel receipts, and proof of payment throughout the year.

Move-Year Tax Implications

The year you move to Germany can be more complicated than a normal tax year. If you became tax resident in Germany during the year, foreign income earned before or after the move may still affect your German tax rate through the progression clause, known as Progressionsvorbehalt. This does not always mean the foreign income is taxed directly in Germany, but it can increase the tax rate applied to your German taxable income.

This is especially relevant if you moved to Germany during the year, received salary abroad, received unemployment or parental benefits, worked remotely for a foreign employer, or changed from a foreign job to a German job. In these cases, it is worth checking the applicable double taxation treaty and considering professional tax advice.

Language Barrier Solutions

German tax terms can be confusing even for fluent speakers, and ELSTER is not designed as an expat onboarding tool. If you struggle with German forms, consider using English-language tax software, a Lohnsteuerhilfeverein if you are eligible, or a Steuerberater for complex cases.

For simple employee cases, an English-language tax app can be enough. For self-employment, foreign income, investments, RSUs, rental income, or double taxation, a qualified tax advisor is usually safer.

Conclusion

While many taxpayers might hesitate to deal with their tax return because of its complexities, it’s important to submit it to the tax office when you are required to file. For the 2025 tax year, the key self-filing deadline is July 31, 2026, so expats filing in 2026 should not wait until the last minute to collect documents or register for ELSTER.

If you’re an employee, there’s also a risk of not claiming potential tax deductions or tax refunds, leading to unnecessary excess tax payments. With the German tax system offering online tools like MeinELSTER, completing your annual income tax return can be more secure and easier to repeat in future years. For expats, filing can be especially worthwhile if you had relocation costs, commuting expenses, double household costs, foreign move-year income, or professional expenses during the year.

Frequently Asked Questions