What are the types of taxes in Germany?
Perhaps the most important feature of Germany is its taxes, whether in terms of their diversity and abundance, or in terms of rigour and accuracy in their collection. That is why we have not been able to do so.
Perhaps the most important feature of Germany is its taxes, whether in terms of their diversity and abundance, or in terms of rigour and accuracy in their collection. That is why we have not been able to do so.
Disclaimer: Taxes are an important and sensitive topic in Germany, so this article should be considered a simple and concise overview of the most important of these taxes, and in no way should it be relied upon alone to make any decision concerning any tax matter. We recommend that you consult the German Ministry of Finance in any details through their official website:
Introduction:
Introduction:
Before starting to explain in detail the types of taxes we would like to make it clear that taxes in Germany are generally divided into two parts:
Direct taxes, which mean that the taxpayer Steuerschuldner and the tax holder Steuerträger are the same person, i.e. this tax cannot be passed for someone else to pay.
Indirect taxes are not necessary, i.e. the taxpayer can pass that tax for payment by another person.
All the taxes we will explain in this article are direct taxes except:
Umsatzsteuer Sales Tax / Mehrwertsteuer VAT
Lohnsteuer business tax
It is the most important and largest resource for the German tax treasury and is deducted by the employer, and in advance from the employee's salary, i.e. the employee receives his salary deductible from that tax. Therefore, the employee's salary is said before the bruttogehalt deduction i.e. the existing salary and after the nettogehalt tax deduction i.e. nettogehalt net salary.
The question now is how much does this tax amount to? The answer relates to the e-tax features of Elektronische Lohnsteuerabzugsmerkmale / ELStAM for the employee, formerly called the Lohnsteuerkarte tax card.
The most important tax feature is the Steuerklasse tax row which is numbered from one to six:
Tax Row 1: It is intended for unmarried employees.
Tax Row 2: It is intended for unmarried employees with children who take care of them individually, i.e. without the father or mother.
Tax classes 3/4/5: They are for married employees. The difference between them is that grade three is deducted with the lowest tax rate, and number five is the opposite. It is therefore advisable that the husband or wife with the highest income take the tax row number three and the lowest income takes the tax row number five. If their respective incomes are equal, each takes the tax row number four. Taxes are deducted from more than number three and less than number five.
Tax Row 6: In this class, the largest percentage of taxes are deducted from each class and is intended for those who have more than one job at the same time, regardless of whether they are married or not. It is therefore advisable to assign this class to lower-income work.
Note: All previous classes apply to students, and there is nothing dedicated to students in this matter.
The second tax feature we would like to mention is the amount of tax-free children Kinderfreibetrag. Whoever has a child takes Kinderfreibetrag number one and who has two children takes number two and so on. This practically means less tax deduction with each newborn for the taxpayer.
Before we give you a practical example of the above, or rather about the net salary, we need to get to know two additional taxes so that all the details are clear.
Solidaritätszuschlag Solidarity Tax
Tax Row 6: In this class, the largest percentage of taxes are deducted from each class and is intended for those who have more than one job at the same time, regardless of whether they are married or not. It is therefore advisable to assign this class to lower-income work.
Note: All previous classes apply to students, and there is nothing dedicated to students in this matter.
The second tax feature we would like to mention is the amount of tax-free children Kinderfreibetrag. Whoever has a child takes Kinderfreibetrag number one and who has two children takes number two and so on. This practically means less tax deduction with each newborn for the taxpayer.
Before we give you a practical example of the above, or rather about the net salary, we need to get to know two additional taxes so that all the details are clear.
Solidaritätszuschlag Solidarity Tax
It is a tax imposed on all employees in western Germany since 1991, i.e. after the unification between the East and West Germanys. This is to stimulate the then-dilapidated East German economy and to catch up with the development of western Germany. This tax is planned to be 10 years, but it is still in force today.
Kirchensteuer Church Tax
It is an optional tax for Christians affiliated with the Church and can be abolished after an application to leave the Church.
Before we come to the practical example of net salary, there is a section that is deducted from the salary which is not taxed but it is appropriate and useful to mention here, namely social security payments Sozialabgaben
They include:
Krankenversicherung Health Insurance amounts to about 14% of the total existing salary
Rentenversicherung pension insurance amounts to about 9% of the total existing salary
Arbeitslosenversicherung unemployment insurance amounts to about 1.5% of the total existing salary
Pflegeversicherung nursing care insurance amounts to about 2% of the total existing salary
Now that all the necessary information has been available to understand the difference between the existing Bruttogehalt salary and nettogehalt net salary for the employee we come to the practical example:
An employee with an existing monthly salary of 3,000 euros, who is unmarried, will receive 1,900 euros in net salary at the end of the month. In other countries, the number of people who have been forced to work in the united states has increased.
While his current monthly salary is the same but married and has two children, at the end of the month he will receive 2,200 euros in net salary. In other countries, the number of women in the country's total number of women is 12.5 per 1,000.
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