Nuremberg

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Taxes and Contributions

Information on tax requirements, registrations, and social contributions for individuals moving to Nuremberg.

Sections

1. Overview of the German Tax System

Germany has a well-structured tax system that applies uniformly across the country, including Nuremberg. Taxes are collected at the federal, state, and municipal levels. The system is progressive, meaning higher earners pay a higher percentage of their income in taxes. Contributions to social security are also mandatory for most residents.

2. Key Tax Categories in Nuremberg

a. Income Tax (Einkommensteuer)

  • Who Pays?
    Residents of Germany (including immigrants) are subject to income tax on their worldwide income. Non-residents are taxed only on income earned in Germany.
  • Rates:
    Income tax rates are progressive, ranging from 0% to 45%. The tax-free allowance (Grundfreibetrag) for 2023 is โ‚ฌ10,908 for single individuals and โ‚ฌ21,816 for married couples filing jointly.
    • Solidarity Surcharge (Solidaritรคtszuschlag): An additional 5.5% of your income tax, though it has been largely abolished for lower and middle-income earners.
    • Church Tax (Kirchensteuer): If you are a member of a recognized religious community, you pay 8-9% of your income tax as church tax (8% in Bavaria, including Nuremberg).
  • Registration and Payment:
    • Upon starting employment, your employer will deduct income tax, solidarity surcharge, and church tax (if applicable) directly from your salary.
    • Self-employed individuals must register with the local tax office (Finanzamt) and file annual tax returns.
  • Deadlines:
    • Tax returns are typically due by July 31 of the following year. Extensions may be granted if you use a tax advisor.

b. Value-Added Tax (VAT, or Mehrwertsteuer)

  • Who Pays?
    VAT is a consumption tax applied to most goods and services in Germany.
  • Rates:
    • Standard rate: 19%
    • Reduced rate: 7% (applies to essential goods like food, books, and public transportation).
  • Practical Tips for Visitors:
    • Non-EU visitors can claim VAT refunds for goods purchased in Germany when leaving the EU. Ensure you request a VAT refund form (Tax-Free Shopping) from the retailer and have it stamped at customs when departing.

c. Property Tax (Grundsteuer)

  • Who Pays?
    Property owners in Nuremberg pay property tax annually.
  • Rates:
    The tax is calculated based on the assessed value of the property and a municipal multiplier (Hebesatz). In Nuremberg, the multiplier is 535% as of 2023.
  • Payment:
    Property tax bills are sent annually, and payments are typically due in quarterly installments.

d. Trade Tax (Gewerbesteuer)

  • Who Pays?
    Businesses operating in Nuremberg are subject to trade tax.
  • Rates:
    The trade tax rate is determined by multiplying the taxable income by a municipal multiplier. In Nuremberg, the multiplier is 440%.
  • Registration and Payment:
    Businesses must register with the local trade office (Gewerbeamt) and the tax office (Finanzamt).

e. Social Security Contributions (Sozialabgaben)

  • Who Pays?
    Employees and employers both contribute to social security, which covers health insurance, pension insurance, unemployment insurance, and long-term care insurance.
  • Rates:
    • Health insurance: ~14.6% (split between employer and employee, with additional contributions of ~1.3%).
    • Pension insurance: 18.6% (split equally).
    • Unemployment insurance: 2.6% (split equally).
    • Long-term care insurance: 3.05% (split equally, with an additional 0.35% for childless individuals over 23).
  • Payment:
    Contributions are automatically deducted from your salary by your employer.

3. Procedures for Registration and Payment

a. Registering with the Tax Office (Finanzamt)

  • When to Register:
    • If you are employed, your employer will handle most of the registration process.
    • If you are self-employed or starting a business, you must register with the Finanzamt Nuremberg.
  • How to Register:
    • Obtain a tax identification number (Steueridentifikationsnummer) upon registering your residence (Anmeldung) at the local Bรผrgeramt (citizenโ€™s office).
    • Self-employed individuals must complete a tax registration form (Fragebogen zur steuerlichen Erfassung) online or in person.

b. Filing Tax Returns

  • Who Needs to File?
    • Employees: Filing is optional if your taxes are fully deducted by your employer, but you may file to claim deductions.
    • Self-employed individuals and freelancers: Filing is mandatory.
  • How to File:
    • Use the online tax portal ELSTER (Electronic Tax Declaration) to file your return.
    • Alternatively, hire a tax advisor (Steuerberater) for assistance.

c. Deadlines

  • Annual Tax Returns:
    • Due by July 31 of the following year.
    • If you use a tax advisor, the deadline is extended to February 28 of the year after that.
  • Quarterly Payments:
    • Self-employed individuals may need to make advance payments (Vorauszahlungen) quarterly.

4. Local Considerations in Nuremberg

  • Finanzamt Nuremberg:
    Nuremberg has several tax offices depending on your district. You can find your designated office on the official website of the Bavarian tax administration.
  • Language Barrier:
    Most tax documents and resources are in German. Consider hiring a tax advisor or using translation services if you are not fluent in German.
  • Tax Advisors (Steuerberater):
    Tax advisors are widely available in Nuremberg and can help you navigate the system, especially if you are self-employed or have complex tax situations. Fees are regulated and depend on the complexity of your case.

5. Cultural and Practical Tips

  • Keep Records:
    Germans are meticulous about documentation. Keep all receipts, invoices, and financial records for at least 10 years.
  • Understand Deductions:
    Common deductions include work-related expenses, childcare costs, and contributions to retirement plans. Consult a tax advisor to maximize your deductions.
  • Be Punctual:
    Germans value punctuality, and this extends to tax deadlines. Late filings can result in penalties.
  • Tax Refunds:
    Many employees receive refunds after filing their tax returns due to overpayment. Filing is worth the effort even if itโ€™s not mandatory.

6. Resources for Assistance

  • ELSTER Portal:
    The official online platform for filing taxes in Germany. www.elster.de
  • Bรผrgeramt Nuremberg:
    For registering your residence and obtaining your tax ID. www.nuernberg.de
  • Local Tax Advisors:
    Search for "Steuerberater Nuremberg" online or use the Bavarian Chamber of Tax Advisors website: www.bstbk.de

By understanding the tax system and utilizing local resources, you can effectively manage your taxes and contributions in Nuremberg. If you need further assistance, donโ€™t hesitate to reach out to local tax professionals or government offices.