Income tax
Income tax is levied on the income of natural persons. In principle, income tax is collected from certain types of income through tax deduction, such as payroll tax and tax on capital gains.
Income tax applies to income
- from agriculture and forestry,
- from commercial activities,
- from self-employment,
- from employment,
- from capital assets,
- from letting and leasing, and
- other income specified in Section 22 of the Income Tax Act (EStG), such as income from a state pension under the statutory pension scheme or from a private funded pension scheme, or income from private capital gains.
In the case of agriculture and forestry, commercial enterprises and self-employment, income is defined as profit. Profit is to be determined by comparing business assets, or as the surplus of business income over business expenses, or, in the case of smaller agricultural holdings, using standard rates. For other types of income, in order to determine the income, all expenses intended to generate, secure and maintain the revenue – such as income-related expenses – must be deducted from the revenue derived from the respective type of income. Expenses relating to living costs, such as those for food, clothing or accommodation, may not be deducted as business expenses or income-related expenses.
To determine the total income, positive and negative income may, in principle, be offset against one another without restriction both within a single category of income and across different categories of income.
Provided the statutory requirements are met, the following amounts are deducted from this total income:
- Age relief under Section 24a of the Income Tax Act (EStG) for taxpayers aged 64 and over
- Relief for single parents under Section 24b of the Income Tax Act (EStG)
- Tax-free allowance for farmers and foresters under section 13(3) of the Income Tax Act (EStG)
After these amounts have been deducted, the so-called total income remains.
Under certain conditions, the following amounts must be taken into account as deductions when determining income:
- Loss deduction under Section 10d of the Income Tax Act (carry-forward of losses, carry-back of losses)
- Special expenses under Sections 10, 10a, 10b, 10c of the Income Tax Act (EStG), for example, pension contributions, church tax, childcare costs, expenses for one’s own vocational training, school fees, maintenance payments to a divorced or permanently separated spouse or civil partner, and charitable donations
- Extraordinary expenses under Sections 33, 33a, 33b of the Income Tax Act (EStG), for example medical expenses, maintenance payments and expenses for vocational training, flat-rate allowances for disabled people, surviving dependants and carers
The maximum amounts deductible as special expenses for pension provision, for example statutory pension insurance contributions and contributions to one’s own pension scheme, amount to
- a maximum of EUR 23,724 in 2021,
- in 2022, a maximum of 24,100 EUR,
- in 2023, a maximum of 26,528 EUR,
- in 2024, a maximum of 27,566 EUR,
- in 2025, a maximum of EUR 29,344; and
- in 2026, a maximum of EUR 30,826.
For spouses and civil partners assessed jointly, the maximum amount is doubled. For employees, this amount must be reduced by the tax-free employer’s contribution to statutory pension insurance.
Contributions to private and statutory basic health and compulsory long-term care insurance, as well as contributions to other types of insurance, such as liability insurance, unemployment insurance and contributions towards ‘additional benefits’ in health insurance, are recognised as special expenses up to the following annual maximum amounts:
- for business owners or the self-employed: up to 2,800 EUR
- for employees and civil servants: up to 1,900 EUR
Basic contributions to health and long-term care insurance are fully deductible even if the maximum amounts are exceeded. In this case, however, the deduction for other types of provident insurance does not apply.
If you do not provide evidence of higher special expenses, a flat-rate amount of EUR 36.00 for single persons and EUR 72.00 for married couples or civil partners is deducted via the special expenses flat-rate allowance.
As a final step in determining your taxable income, any allowances for children under Sections 31 and 32 of the Income Tax Act (EStG) must be deducted from your income. In 2025, the child allowance amounts to EUR 6,672 (2026: EUR 6,828) and the allowance for childcare, upbringing or education costs amounts to EUR 2,928. As part of the family benefits adjustment, a check is carried out to determine whether child benefit or the tax allowances for children would be more favourable for you when your income tax is assessed. If deducting the tax allowances for children is more favourable for tax purposes, these are deducted from your income and any child benefit already received is offset against this.
In the case of a couple who are both subject to unlimited income tax liability but do not live together, child benefit is primarily paid to the person in whose care the child is. In principle, each parent receives half of the child allowance and, where applicable, half of the allowance for childcare, upbringing or education. Half of the child benefit is then offset against each parent’s tax liability. Under certain conditions, it is possible to transfer the child allowances to one parent.
The taxable income calculated in this way forms the basis for assessing income tax at the standard rates. The income tax calculated according to the tax scale, reduced by the domestic and, where applicable, foreign taxes to be credited, as well as any further tax relief – for example, for expenses relating to domestic employment and services – and increased by certain amounts, constitutes the income tax to be assessed.
The income tax advance payments made for this year, together with payroll tax and, where applicable, capital gains tax, are set off against the assessed income tax. If the final calculation results in a shortfall to your disadvantage, you must pay this amount as a final instalment. If the final calculation results in a surplus in your favour, this amount will be refunded to you.
The income tax you are liable to pay is determined by the income tax scale.
In 2025, it is structured as follows:
- Tax-free allowance up to a basic allowance of 12,096 EUR for single persons / 24,192 EUR for married couples or civil partners
- Tax rate of 14 per cent on taxable income from 12,097 EUR / 24,193 EUR (entry-level tax rate)
- Tax rate of up to 45 per cent on taxable income from 277,826 EUR / 555,652 EUR (top tax rate)
In the case of extraordinary income, you may claim tax relief to avoid hardship that may arise as a result of the progressive tax scale. In such cases, at least the introductory tax rate must be applied.
Forms/Online Services
Details
Prerequisite
A prerequisite for income tax assessment is that you either
- have your domicile or habitual residence in Germany (unlimited tax liability) or
- do not have your domicile or habitual residence in Germany, but have earned certain domestic income (limited income tax liability).
In addition, there is extended unlimited tax liability and unlimited tax liability upon application.
Spouses or civil partners who are both subject to unlimited tax liability and have lived together for at least one day in the year may, provided these conditions were met at the start of the calendar year or arose during the course of the year, choose between separate assessment and joint assessment.
- In the case of separate assessment, the income received by each spouse or civil partner is attributed to that person. The amounts deductible as special expenses, extraordinary burdens and household-related employment or services are taken into account for the spouse or civil partner who incurred them. Upon a joint application, the spouses’ or civil partners’ deductible amounts may be divided equally. If the amounts were transferred from a joint account, they are generally divided equally. The tax to be assessed is based on the standard tax rate.
- In the case of joint assessment, the income earned by the spouses or civil partners is added together, attributed jointly to them, and the spouses or civil partners are treated jointly as a single taxpayer. Income tax is calculated using the splitting method. Under this method, tax is calculated at the basic rate on half of the joint income, and the amount thus determined is then doubled. This method generally results in a lower tax liability than under individual assessment.
Procedure
You are required to submit an income tax return using the official form to the tax office responsible for your place of residence, which you must sign.
If you have income from
- business activities,
- self-employment or
- agriculture and forestry
or have a share in these types of income, you must submit your tax return electronically. This applies – regardless of the method used to calculate your profit – not only to the EÜR (cash-based accounting) annex and the balance sheet, but also to the entire income tax return.
You also have the option of submitting your tax return electronically with authentication. You authenticate yourself using the ELSTER certificate. This functions as an electronic signature and is intended to ensure
- confidentiality,
- identity of the sender and
- the integrity of the content
of the data sent.
To obtain a certificate, you must register on the ELSTER online portal. This involves several steps. For example, submitting your registration details, receiving a confirmation email from the ELSTER online portal, and receiving the activation code by post. You should therefore complete the registration in good time so that you can prepare and submit your tax return by the deadline.
Once you have registered on the ELSTER online portal, you can also take advantage of the pre-filled tax return. The pre-filled tax return is a free service provided by the tax authorities, designed to make it easier for you to complete your tax returns for the years from 2012 onwards. The tax authorities provide you with the following personal data and supporting documents stored on file:
- Income tax certificates submitted by your employer,
- notifications regarding the receipt of pension benefits,
- contributions to health and long-term care insurance, and
- pension contributions (e.g. Riester or Rürup schemes)
- Wage replacement benefits paid (e.g. unemployment benefit, sick pay, parental allowance)
If you have registered for the document retrieval service, you can automatically import this data when completing your income tax return.
Tip: The tax authorities provide the forms free of charge.
Deadlines
- For compulsory income tax assessments for 2024: 31 July 2025
- For mandatory income tax assessments for 2025: 31 July 2026
- For mandatory income tax assessments for 2026: 31 July 2027
The tax office may extend these deadlines upon application.
If your income tax return is prepared by a tax adviser, a generally extended filing deadline applies from 2018 onwards, running until 28 or 29 February of the second year following the tax year in question.
- For income tax assessments made on application for the 2022 tax year: 31 December 2026
- For assessments based on a tax return for the 2023 income tax year: 31 December 2027
- For income tax assessments based on a return for 2024: 31 December 2028
- For income tax assessments based on a return for the 2025 tax year: 31 December 2029
Your tax return must be signed by hand to ensure it is received by the tax office in good time.
Please note: If you submit your tax return electronically without authenticating it – that is, without an ELSTER certificate – the tax office will only consider the return to have been received once you have submitted the compressed tax return bearing your handwritten signature. In this case, simply submitting the tax return electronically is not sufficient. This is particularly important to bear in mind when submitting a tax return on the basis of a request for assessment. If you submit the compressed tax return to the tax office after the four-year deadline has expired, your request will be deemed to be late.
Required documents
You do not need to submit any supporting documents. It is sufficient to keep them at home.
Costs
There are no procedural costs.
Miscellaneous
You can also obtain information from your local tax office.
If you are a business owner, you must submit your balance sheet or profit and loss account, as well as your income tax return, electronically.
Legal basis
Einkommensteuergesetz (EStG)
Release note
machine generated, based on the German release by: Oberfinanzdirektion Baden-Württemberg; Finanzministerium Baden-Württemberg, 24.09.2026

