Whether you are lucky enough to have your company provide a tax preparation service to you or you have to worry about your taxes yourself it’s always good to understand some of the vocab.
To start with…
Einkommen ( income) + Steuer (tax) + erklärung (explanation) =
Einkommensteuererklärung (income tax return)
… if only they were all that easy! The following are some words, phrases and explanations are for the Anlage N document which are useful for expats.
Anlage N – Einkünfte aus nichtselbständiger Arbeit (Income from employment)
Jeder Ehegatte mit Einkünften aus nichtselbständiger Arbeit hat eine eigene Anlage N abzugeben - Each spouse with earned income (not from self-employment) must turn in Form N
- Bruttoarbeitslohn – gross pay
- Lohnsteuer – wage tax, the rate depends on which bracket (Lohnsteuerklasse) you are in
- Solidaritätszuschlag – literally ’solidarity supplement’, enacted in 1991 originally to pay for costs from reunification and Gulf War I but is now used to pay for support for southern and eastern European countries. Historically 5.5-7.5% but now seems to be about ~1% looking at a recent paystub.
- Kirchensteuer – church tax (see our earlier post on Getting the Anmeldebestätigung
- Steuerfeier Arbeitslohn nach Doppelbesteuerungsabkommen / zwischenstaatlichen Übereinkommen – tax-free wages based on double-taxation agreements (you have to declare any income you made prior to moving to Germany within the year, but you are not taxed on it
If these few words are making your head spin (as they do mine), it’s time to call an accountant. What tax related words would you add to this list?
