Non-resident individuals are taxed (usually by withholding) on German source income only.
Taxable income covers income from the following categories: Non-residents are taxed on their German income … All resident individuals are taxed on their worldwide income. In Germany, income tax is known as Einkommensteuer.Income taxes are paid throughout the year in the form of ‘wage tax’ (Lohnsteuer).In most circumstances, if you live in Germany continuously for more than 6 months you must file a tax declaration (Steuererklärung) with your local tax office (Finanzamt).. Who has to pay income tax in Germany? If the income from employment is subject to wage tax withholding, the tax obligations are fulfilled with the withholdings and no German tax return needs to be filed. If you have worked more than 183 days in Germany, and if your country has signed agreements with Germany to avoid double taxation (Doppelbesteurung), you must pay income tax in Germany. The tax year in Germany is the calendar year. In other words, the payroll withholdings become final. As is the case for people resident in Germany, non-residents (people with limited tax liability in Germany) are subject to withholding tax on income earned from employment by an employer in Germany (wages tax) and on certain types of income from capital assets (final withholding tax, and withholding tax on income from capital). Non-residents are subject to German income tax on any German income, but note that expats may also be liable for taxes in their home country. The tax office uses your tax return to see if you are paying enough income tax. Germany Individual - Taxes on personal income Last reviewed - 10 January 2020. Non-residents are subject to tax on certain categories of income from German sources under the concept of limited tax liability.
The fiscal year in Germany runs from January 1 to December 31.