All taxpayers are required to submit an annual tax return to their local tax authority or Finanzamt. Your local tax authority will be situated in the same region as your company’s German head office.
When companies are established, or registered as businesses, they need to be simultaneously registered at the tax office. This is done by means of filling in a “tax assessment questionnaire.”
Tax collection and when payment is due
The main types of tax (i.e. corporate income tax, personal income tax, trade tax and VAT) are usually paid in advance. These advance payments are usually paid either once a month or on a quarterly basis. The tax authorities will set the precise period between instalments based on the total amount of tax that you are expected to pay that year. When it comes to filling in your annual tax declaration, these advance payments will be taken into account and deducted from your total liability. The deadline for submitting your tax declaration for any given year is May 31st in the following year. If you need an extension of the deadline, it is possible to request one. Though information on tax issues can be obtained from the tax authorities, companies should also employ a tax consultant to ensure that their tax declaration is properly completed – and also that it is completed in a way that best suits the company’s budget. Find the best tax consultant for you by consulting the register of practitioners provided by the Deutscher Steuerberaterverein e.V. (or, in English the German Association of Tax Advisers).
Taxes on employees’ wages
The income tax that employees pay is known as Lohnsteuer. Each month, employers must deduct this tax from wages before they are paid to employees and then transfer it to the tax authority. If one of your employees is also self employed they may have to submit a tax return each year as well.
Completing your tax return online
Companies and private individuals alike can submit their tax declarations electronically when paying income tax, wage tax, and VAT. Indeed, business owners are obliged to use this electronic method. The Central Tax Office has an online Tax Information Centre which provides information about submitting your declaration alongside the relevant electronic forms.