Do you need to file a German tax return?

Generally, everyone who lives in Germany has a filing liability. Unlike other countries, Germany does not tie the filing liability on the nationality. The filing liability ties to the residency status of an individual.

An individual is considered as German resident (according to local tax law) when his habitual abode is based in Germany (Germany is his usual place of living). Also, an individual is considered as German resident, if the individual does have his own residency (regardless if it is rented or owned), meaning he can use the residency whenever he likes. This would be the usual reason for a filing liability, because most taxpayers will live in Germany in a residency or at least can use the residency of someone else (parents, friends, partner).

In addition, individuals have to file a German tax return if they regarded as non-resident taxpayer but have German sourced income. Such income can come from a German (rental) property, from other German investments or specific business carried out in Germany like acting, being a representative of a German company or other specific reasons.

Only for German employees, who have – besides other conditions – only employment income from one employer during the year and, simplified, no change in the general conditions, there is a relief in the filing liability. However, these taxpayers can file a tax return, if it is beneficial for them.

For more details on this topic, please contact me.