If you worked in any of these countries, you could be due a Tax Refund

Are you a foreigner moving to Germany for work? Here’s everything you need to know!

#TaxTipsGermany

Are you considering moving to Germany for work? The country is a very popular destination for those seeking employment abroad.

It is known as the European land of opportunities, with a highly-developed economy, great infrastructure, clean and orderly. But what’s life in Germany truly like?

We will prepare you for any challenges. Our guide contains the information you need to get started, including how to obtain your visa and plan your finances, so that you can successfully move to Germany for work. So, keep reading.

How to move to Germany

Since Germany is such a popular destination for expats, the process of relocating there is slightly more competitive than in other countries.

Moving to Germany without a job is more difficult since you must detail your financial situation to authorities, making unemployed applicants less desirable.

Each immigration purpose has a financial threshold that applicants must meet, but you should prove your finances regardless of intent.

If you are relocating there because of work, you will have to demonstrate that you can support yourself financially, and the government expects you to show proof that you can afford your bills until your first paycheck arrives.

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Moving to Germany for work

These are the steps to moving to Germany for work:

  1. Look for a job in Germany that accepts foreign nationals

2. Apply for the German Working (Employment) Visa (EU citizens do not need one)

3. Move there and get a working residence permit

You can move to Germany with a working visa if you find suitable employment.

If your German could be better, it can be challenging to find work after migrating.

There are English-speaking jobs available in Germany, however, this is a highly competitive jobs market.

If you are in a general field, it may be difficult, but not impossible, to find employment.

If you work in a technical profession, such as engineering or programming, you will most likely be able to find work in Germany, because there is a shortage of trained labor in those fields.

Germany has a well-deserved reputation for treating its workers with respect. They are contracted for fewer hours than employees in the United States and the United Kingdom, and every employee is entitled to at least 30 days of yearly leave.

After a few years, you may be able to apply for a permanent residency permit.

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German visas and work permits

Germany offers a variety of visa options, including work permits and skilled worker (European Blue Card) visas, as well as self-employment and family reunion visas.

Germany is an EU member state, which means that people from EU/EFTA (European Free Trade Association) can enter and stay in the country without a visa as tourists for any length of time. 

Residents from the EU/EFTA who are staying for more than three months must register with the local administration. The German immigration system is more restricted for non-EU/EFTA nationals.

If you are from one of the countries from the list below, you can enter Germany for up to 90 days without a visa within any 180-day period and you can conduct business, but not work.

Any other country's citizens require a visa to enter Germany. If you are remaining in the country after the expiration of your visa, you must obtain a residence permit.

Albania

Andorra

Antigua and Barbuda

Argentina

Australia 

Bahamas

Barbados

Bosnia and Herzegovina 

Brazil

Brunei

Canada

Chile

Colombia

Costa Rica

Dominica

El Salvador

Georgia

Grenada

Guatemala

Honduras

Hong Kong

Israel

Japan

Kiribati

Macao

Malaysia

Marshall Islands

Mauritius

Mexico

Micronesia

Moldova

Monaco

Montenegro

New Zealand

North Macedonia

Nicaragua

Palau

Panama

Paraguay

Peru

Saint Kitts and Nevis

Saint Lucia

Saint Vincent

Samoa

San Marino

Serbia

Seychelles

Singapore

Solomon Islands

South Korea

Taiwan

Timor Leste

Tonga

Trinidad and Tobago

Tuvalu

Ukraine

United Arab Emirates

United States of America

Uruguay

Vanuatu

Vatican City

Venezuela





Visa Application at the German Embassy

If you require a German visa,  you can apply for either an Employment Visa or a Job-Seeker Visa. The type of visa you apply for is determined by whether or not you have a job offer:

1. Apply for an employment visa - If you already have a job offer from a company in Germany and wish to enter the country to obtain a work and residence permit, you must apply for an Employment Visa.

2. Apply for a Job-Seeker visa - If you wish to go to Germany and look for work. It is valid for six months and requires you to hunt for and find work throughout that time. Once you've found a job, you can apply for a work and residency permit.

The Job-Seeker and the Employment Visas are considered long-term visas. You'll need one to enter Germany lawfully, notifying authorities that you're going to settle and work there. You must apply for a residence permit before your visa expires.

Almost everyone is required to apply for a visa for employment/job-seeking at their home country's German Embassy or Consulate.

Only citizens of the United States of America, Australia, Canada, Israel, Japan, New Zealand, Switzerland, or South Korea are exempt from applying for a visa. In this situation, you can just enter Germany, look for work, and apply for a work permit - no entrance visa required.

You cannot enter Germany on a tourist visa and apply for a work permit.

How to apply for a work permit

When you enter Germany, you must apply to the German Immigration Authorities (Ausländerbehörde) for a single work and residence permit.

Most visitors must also get a visa from the German Embassy in order to enter the country. These are the steps that you need to go through:

1. Apply at the German Embassy for an Employment Visa or a Job-Seeker Visa.

2. Register your current residence at the local Bürgeramt (Citizenship Registration Office).

3. Get health insurance.

4. Schedule a meeting with the Ausländerbehörde.

5. Collect all of the necessary documentation.

6. Submit an application for a work and residence permit to the Ausländerbehörde.

As long as you qualify for a work permit, you should typically begin your application through the German Embassy in your current country of residence.

The Average German Tax Refund is €1020

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Registering your address in Germany

When you choose a place to live in Germany and move in, you must register your address with the local Resident's Registration Office (Bürgeramt). The steps are as follows:

  1. Make an appointment with your local Bürgeramt. If you're not sure where that is or how to contact them, simply Google "Bürgeramt + the name of your city."

2. Fill out the registration form. You can pick up a physical copy of the form at the Bürgeramt or download it.

3. Gather the following documents:

  • Rental contract

  • Your landlord's confirmation that you have moved in at your address

  • Your passport

4. On the day of your appointment, bring the documents to the Bürgeramt.

5. Obtain your Registration of Residence Document (Meldebescheinigung). It is required when applying for a work and residence permit at the Ausländerbehörde. You will normally get it the same day you apply.

Getting health insurance

You will be required to provide proof of health insurance when applying for your German visa/work/residence permit and you will be unable to immigrate to Germany unless you have appropriate insurance coverage.

Since you can't be sure whether German authorities will accept foreign health insurance, it's best to have German health insurance.

There are two types of health insurance: private health insurance and public health insurance.

If you have found a job, see if your boss can set you up with it. Alternatively, contact a few insurance providers to see what kinds of pricing they have.

The majority of people in Germany are covered by the Government Healthcare System, but there are also private healthcare companies that provide more complete care packages. Private health insurance prices, on the other hand, can range from $115 to over $1,000 per month.

Open a bank account

When you arrive in Germany, take your passport and residence certificate to your preferred bank to open a bank account.

It will be required in order for you to receive your salary and make regular payments such as rent, utility bills, phone costs, taxes, insurance, and so on.

Opening a bank account in Germany might be difficult at times because not all bank employees speak English. Furthermore, all official documents including bank communications are typically written in German. 

Some banks in Germany demand you to deposit a certain amount each month—typically around 1,000 ($1,100 ).

The good news is that there are now various English banking choices in Germany, allowing you to open a bank account entirely in English. Some even let you open a bank account before you arrive in Germany.

If you are not from the EEA, you must show proof that you are registered and living in Germany, as well as your German work permit.

Our partner My Life in Germany have prepared a detailed guide all about opening a bank account in Germany. They outline various English banking options, so be sure to check the guide out!

How does the social security system work in Germany?

The German social security system ensures that its residents, particularly those who are jobless, elderly, sick, or crippled, can live comfortably.

The cost of social security is around 40% of an employee's gross income; however, most companies will cover half of the expense. This means that German citizens who pay into the social security system only lose 20% of their income.

Citizens are not required to physically pay the money because it will be deducted from their gross income before they receive it. 

If you earn less than €400 per month or work less than 50 days per year, you are exempt from paying German social security.

Taxes in Germany

Let’s face it. Nobody likes tax! But there is no escaping the topic, even if you move to Germany.

Germany has a high tax rate. German nationals and expats working in Germany must pay income tax.

The first €9,744 (2021) is the tax-free allowance and you will pay tax on earnings beyond this amount solely.

Income tax rates in Germany are progressive, beginning at 14 percent and rising to 45 percent on the highest wages. Every year, the German government revises its tax bands.

The larger your income, the higher the tax rate you will have to pay, and you'll have to file a tax return every year if you want to get any money back.

Income tax rates for single persons in Germany for 2021

Income (EUR)

Income Tax Rate 2021

0 – 9,744

0%

9,745 – 57,918

From 14% to 42%

57,919 – 274,612

42%

Above 274,612

45%

 

If you are considered a German resident for tax purposes, regardless of whether you are a German national or an expat, you must pay German income tax and report your worldwide income. The foreign income is taken into consideration in order to determine the percentage used to tax the German income. 

If you spend more than half of the calendar year (183 days) in Germany, you are generally considered a resident for tax purposes.

If you are not considered a resident for tax purposes, you still have to report your foreign income on a tax return in Germany, as it will be taken into consideration in order to determine the % used to tax the German income. You will always be required to pay tax on your income earned in Germany.

Foreign residents are required to pay the same taxes as German nationals, while there are agreements in place for people who are subject to double taxation in Germany and their native country.

Broadly speaking, filing taxes on your own as an expat in any nation can be difficult due to language barriers and a lack of local understanding of the subject.

Most individuals who file a tax return will take advantage of tax deductions to minimize their overall tax bill and boost their chances of receiving a refund.

Many different sorts of payments can be claimed as tax-exempt under the German tax system and expenses can reduce your taxable income.

You should always get professional help from a tax expert on your specific tax situation.

As a foreigner, can I get a tax refund from Germany?

If you have worked in Germany you may be entitled to a German tax refund.

When they file their annual tax return, nine out of 10 German taxpayers receive a refund.

Most people with earnings in Germany can claim back a portion of the income tax they paid throughout the year.


There are a variety of scenarios that may result in you receiving a German tax refund.

These include the following:

  • Your annual income was under the tax-free allowance

  • You had a temporary job or worked part-time in Germany

  • You were not correctly classified for tax payments

  • You financially supported your parents or other dependants in your home country

  • You paid rent in both Germany and your home country

  • You paid for flights to and from Germany

  • You incurred work-related expenses such as travel costs

You can use our refund calculator for a free evaluation of your German refund. That means you have nothing to lose by checking how much you’re owed.

Can I get a pension refund from Germany?

If you are from a non-European Union country and you worked in Germany, it's likely that pension payments were deducted from your salary every month.

In Germany, pension insurance contributions (Rentenversicherung) are typically 9.75% of your wage.

If you decide to leave Germany and stay out of the country for at least two years, Taxback.com can apply to get all your pension payments refunded.

With our help, our customers receive an average pension insurance refund of €5,410 from Germany.

To be eligible for a German pension rebate, you must be a non-EU resident (excluding Turkey, Israel, and the former Yugoslav republics) and have contributed to the German Pension Fund for less than 60 months (5 years).

The average German pension insurance refund is €5410

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Who can help me file my tax return and claim my tax refund?

Since 1996, Taxback.com has been providing German income tax services and our average refund is €1,020. We guarantee that you will receive the maximum German tax refund available. Use our income tax calculator for Germany to find out what you're owed!

Why choose Taxback.com?

Here is why:

  • Our tax experts will make sure that you receive every expense and relief to which you are entitled.

  • We'll transfer your maximum legal German tax refund directly to your bank account, anywhere in the world

  • It's an easy online service. We do the paperwork. You get the money!

  • Have a tax question? Our Live Chat team is available 24 hours a day, 7 days a week to assist you.

The Average German Tax Refund is €1020

GET YOURS NOW

 

About The Author

Kristina Valcheva - Digital content writer @ Taxback.com

Kristina is a digital content writer at Taxback.com. She has a strong interest in finance and technology, and her background is in media, journalism and sales.

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