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EXPLAINED: The rules and deadlines for filing German taxes in 2021

From an upcoming deadline to special tax breaks, here's what you need to know about filing taxes in 2021.

EXPLAINED: The rules and deadlines for filing German taxes in 2021
Photo: picture alliance/dpa/dpa-tmn | Christin Klose

Who is required to file tax returns in 2021?

Generally, if your only source of income is your salary, you won’t need to file a tax return. But if you receive any further sources of income, totaling more than €410, you fall into the category of people required to file taxes. 

As a result of the pandemic, more people than usual will have to file taxes. According to the tax rules, anyone who received €410 or more in wage replacement benefits – for example, in short-time work benefits (Kurzarbeit) – will need to file a tax return.

In April of 2020, over six million employees were receiving Kurzarbeit benefits, according to the Federal Agency for Employment. 

READ ALSO: What you need to know about Germany’s Kurzarbeit job support scheme

Other wage-replacement benefits which may need to be declared include parental and unemployment benefits.

Additionally, all self-employed people and freelancers must file tax returns. Unlike some other employees who can still use paper, all freelancers must file their taxes using the online platform, Elster.

And unlike workers whose taxes are paid automatically by their employers, freelancers must pay the relevant taxes directly to the German finance authority, which is possible through the Elster system. 

What are the deadlines for filing this year?

This was extended – but is fast approaching. If you are someone who is required to file tax returns, you now have until October 31st 2021 to get your paper work off to the tax office. The deadline for filing taxes is usually July 31st of the following year. 

Meanwhile, people who opt to enlist the help of a tax advisor will be given until May 31st next year to sort out their 2020 tax returns, as opposed to December 31st.

If you are not required to file a tax return, but would like to, you have four years to complete the process. That means that you don’t have to file your 2020 tax return until 2024 and, this year, you have until December 31st to file tax returns from 2017.

If you expect that you’ll need more time beyond these deadline, you should apply for an extension through your local tax office. If you miss the deadline, you can incur a fee of 0.25 percent of your owed taxes for every late month. 

When do self-employed workers pay their taxes?

If you work for yourself, there are some other deadlines that you should keep in mind. Freelancers, small business owners, and self-employed workers are required to pay their taxes directly to the authorities. 

Most freelancers have to pay upfront taxes for the upcoming year, on a quarterly basis. These advanced payments should be made by the 10th day of the following months: March, June, September, and December. 

READ ALSO: Everything you need to know about becoming a freelancer in Germany

Are there any changes to the tax code for 2021?

Some temporary tax relief measures introduced during the Covid-19 pandemic – like the reduced value-added tax (VAT) rate on the restaurant industry – are coming to an end in 2021. However, there are also new benefits that most Germans can look forward to this year. 

In response to the effects of the pandemic, which forced many to work from home, the German government introduced a home office flat rate. This tax benefit allows you to claim up to €5 for every day spent entirely working at home in order to reimburse you for additional costs, like a higher electricity bill. You can claim up to €600 total through this policy. 

Another change concerns the basic tax allowance, the amount of money on which you don’t have to pay taxes. This year, the tax allowance increased slightly from €9,168 to €9,408. 

The basic child tax credit also increased by just under €200 for the year.

READ ALSO: What you need to know about tax changes in Germany in 2021

One other interesting change is the introduction of tax benefits for property owners who pursue energy-efficient renovations.

One to thing to note for future tax returns is that in 2021, the German government cut the solidarity tax contribution (Solidaritätszuschlag or Soli, for short) for around 90 percent of all tax payers. Some of Germany’s highest earners and corporations will still need to pay the Soli for the time being.  

The solidarity tax, which was introduced in 1991, was intended to pay for reconstructions efforts in the former East German states and promote German unity. In 2019, the German parliament voted to dismantle the tax requirement, a decision which went into effect this year. 

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REVEALED: The most commonly asked questions about Germans and Germany

Ever wondered what the world is asking about Germany and the Germans? We looked at Google’s most searched results to find out – and help clear some of these queries up.

Hasan Salihamidzic, the sports director of FC Bayern, arrives with his wife at Oktoberfest in full traditional dress. Photo: picture alliance/dpa |

According to popular searches, Germany is the go-to place for good coffee and bread (although only if you like the hard kind) and the place to avoid if what you’re looking for is good food, good internet connection and low taxes. Of course, this is subjective; some people will travel long stretches to get a fresh, hot pretzel or a juicy Bratwurst, while others will take a hard pass.

When it comes to the question on the bad Internet – there is some truth to this. German is known for being behind other rich nations when it comes to connectivity. And from personal experience, the internet connection can seem a little medieval. The incoming German coalition government has, however, vowed to improve internet connectivity as part of their plans to modernise the country.

There are also frequent questions on learning the German language, and people pointing out that it is hard and complicated. This is probably due to the long compound words and its extensive grammar rules, however, as both English and German are Germanic languages with similar words in common, it’s not impossible to learn as an English-speaker.

Here’s a look at some of those questions…

Why is German called Deutsch? Whereas ‘German’ comes from the Latin, ‘Deutsch’ instead derives itself from the Indo-European root “þeudō”, meaning “people”. This slowly became “Deutsch” as we know it today. It can be a bit confusing to English-speakers, who are right to think it sounds a little more like “Dutch”, however the two languages do have the same roots which may explain it.

And why is Germany so boring? Again, probably a generalisation, especially given that Germany has a landmass of over 350,000 km² with areas ranging from high rise, industrial cities to traditional old town villages and even mountain ranges, so you’re sure to find a place that doesn’t bore you to tears.

Perhaps it is a question that comes from the stereotype that Germans are obsessed with strict about rules, organised and analytical. Or that they have no sense of humour – all of these things being not the most exciting traits. 

Either way, from my experience I can confirm that, even though there is truth to German society enjoying order and rules, the vast majority of people are not boring, and I’m sure if you come to Germany you’ll meet many interesting, funny and exciting people. 

READ ALSO: 12 mistakes foreigners make when moving to Germany

When it comes to the German weather, most people assume a cold and cloudy climate, however this isn’t entirely true. While the autumn and winter, especially in the north, comes with grey skies and sub-zero temperatures, Germany can have some beautiful summers, with temperatures frequently rising above 30C in some places.

Unsurprisingly, the power and wealth of the German nation is mentioned – Germany is the largest economy in Europe after all, with a GDP of 3.8 trillion dollars. This could be due to strong industry sectors in the country, including vehicle constructions (I was a little surprised to find no questions posed on German cars), chemical and electrical industry and engineering. There are also many strong economic cities in Germany, most notably Munich, Frankfurt am Main and Hamburg.

READ ALSO: Eight unique words and phrases that tell us something about Germany

Smart and tall?

Why are Germans so tall? They are indeed taller than many other nations, with the average German measuring a good 172.87cm (or 5 feet 8.06 inches), however this may be a question better posed to the Dutch, who make up the tallest people in the world.

Why are Germans so smart? While this is again a generalisation – as individuals have different levels of intelligence in all countries – this question may stem from Germany’s free higher education system or their seemingly efficient work ethic. Plus there does seem to be some scientific research behind this question, with a study done in 2006 finding that Germans had the highest IQ in Europe.

So, while many of the questions posed about Germany and Germans on Google stem from stereotypes, we can confirm that some aren’t entirely made up. If you’re looking to debunk some frequently asked questions about France and the French, check out this article by our sister site HERE.