Tax reliefs in Germany: Some of the most useful tax reliefs in Germany that could save you money.
Main Tax reliefs in Germany
Kindergeld
This is a monthly payment to parents for each child up to the age of 18 (or 26 if they are in full-time education/training). The amount you receive depends on your income and number of children.
Werbungskostenpauschale
This allowance can be claimed for expenses incurred while carrying out your professional duties, such as travel costs, work-related phone calls, and stationery.
Pendlerpauschale
This is a monthly payment to help cover the costs of traveling to and from work. The amount you receive depends on how far away your workplace is from your home.
What are the different types of tax reliefs in Germany?
There are a few different types of tax reliefs in Germany. The most common type of tax relief is the reduction of taxable income. This can be done in a few ways, such as through deductions or exemptions. Another type of tax relief is the reimbursement of certain taxes. This happens when the government pays back part of the taxes that were paid by the taxpayer. The third type of tax relief is the reduction of social security contributions. This occurs when the employee’s contributions to social security are lowered, which results in a smaller deduction from their pay check.
How can you benefit from tax reliefs in Germany?
Tax reliefs are a way for the government to encourage people to do something that is in the public interest. There are a number of different types of tax relief, and each one is designed to help people in a particular way.
There are two main types of tax relief: those that reduce the amount of tax you have to pay, and those that give you a refund of some of the tax you have already paid. Some tax reliefs are available to everyone, while others are only available to people who meet certain conditions.
The most common type of tax relief is the personal allowance. This is a tax allowance that everyone is entitled to, regardless of their income. It reduces the amount of tax you have to pay by £11,500 in 2019-20.
Other common types of tax relief include:
- The marriage allowance, which allows married couples and civil partners to transfer up to £1,250 of their personal allowance to their spouse or partner
- The blind person’s allowance, which gives a tax exemption of £2,450 to people who are blind or severely sight impaired
- The disability allowance gives a tax exemption of £2,100 to people who have a disability that affects their ability to work.
When should you apply for tax reliefs in Germany?
- There are a few key points to remember when considering tax reliefs:
- You should apply for tax reliefs as soon as you become eligible.
- You can only claim tax reliefs for expenses that are related to your work.
- You must keep accurate records of all of your expenses.
Some of the most common tax reliefs in Germany
- Capital Allowances: This is a relief that allows you to write off the cost of certain types of equipment against your profits.
- Employee Expenses: If you have to pay for work-related expenses, you may be able to claim a tax deduction for them.
- Business Travel: If you have to travel for work, you may be able to claim a tax deduction for your travel expenses.
- Home Office: If you use part of your home for business purposes, you may be able to claim a tax deduction for the associated expenses.
How do you apply for tax reliefs in Germany?
There are a number of different tax reliefs available to businesses. To apply for tax relief, you need to complete the relevant application form and send it to HMRC.
The most common types of tax reliefs available to businesses are:
- Research and development (R&D) relief
- Capital allowances
- Business rates relief
- Employer’s National Insurance contributions (NICs) relief.
What are the consequences of not applying for tax reliefs in Germany?
There can be many consequences for businesses that do not apply for tax reliefs. One of the main consequences is that the business may be paying more tax than they need to. This is because many tax reliefs are available to businesses, but not everyone knows about them or applies for them.
Another consequence of not applying for tax reliefs is that the business may be missing out on valuable funding opportunities. This is because many tax reliefs come with a funding element, which can be very helpful for businesses that are looking to expand.
Finally, not applying for tax reliefs can also lead to a higher tax bill. There are a number of tax reliefs available in Ireland, including the earned income tax credit, property tax relief, and the home carer’s credit. If you don’t apply for these reliefs, you could be missing out on significant savings.
Tax reliefs in Germany: To wrap things up
The German tax system is notoriously complex, but there are a number of tax reliefs and allowances that can help taxpayers save money on their annual bills. In this article, we have discussed some of the most common tax reliefs in Germany. We hope you find this information helpful! If you have any questions, please feel free to follow us on social media or visit our website for more information.
If you found this article helpful, please go to the rest of the website for more about accounting in Germany, the general accounting standards, some of the tax reliefs in Germany, audit requirements, an overview of Financial Reporting, understanding the German tax system, or more accounting and financial topics in International Accounting, Audit, Taxation, Accounting Software, Cloud Accounting and Accounting Automation.
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