Otherwise, however, anyone who resides in Germany and earns money must pay income tax. If your income is below this amount, you do not have to pay income tax. The basic exemption level is adjusted annually and currently amounts to €10.347 (As of 2022). The same applies if you have a mini-job or your income is below the so-called basic exemption level ('Grundfreibetrag'). These include parental allowance ('Elterngeld'), unemployment benefits', BAföG and scholarships. There are also earnings on which you do not have to pay any income tax. and other types of income mentioned in the income tax law, for instance, pensions.There are seven types of income for which you have to pay an income tax in Germany. It makes up most of the state revenue and is paid by both employees and self-employed individuals, so it applies to almost everyone.

Income tax ('Einkommensteuer') is the most significant tax collected in Germany. Therefore, filing a tax return can possibly mean the Tax Office will refund you. Nevertheless, it may be worth the effort because the Tax Office may have collected more than it was due. So, as an employee, you often are not obliged to file a tax return. If you are employed, however, it is your employer who deducts the due income tax (as 'Lohnsteuer') from your salary and transfers it directly to the Tax Office. In principle, self-employed individuals and entrepreneurs are required to file a tax return and must ensure they disclose their incomes to the Tax Office and transfer the due taxes.

Whether you have to file a tax return depends on various factors. Tax returns are handed to the Tax Office ('Finanzamt') once a year. You can learn more about different types of tax in our chapter ' German Tax System'.

your salary as an employee, your income from self-employment, as well as, for instance, the interest you win from your savings or rental income. Income tax is deducted from the money you earn over the year, i.e. The tax return has to do with the most notable tax we pay: the income tax ('Einkommensteuer').

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