Tax relaxation for Indians in Germany

Question

I have recently employed in Germany for one year. I am from India. Is there any tax relaxation for Indians in Germany? I am married.

Answer 1

Is there any tax relaxation for Indians in Germany?

I've never heard of such a tax relaxation that you describe in the comments for Germany. Moreover, I'm not aware of any form of the income tax declaration asking questions that would treat German income of a foreign worker with tax residence in Germany different from German income of German citizens with tax residence in Germany.

However, I'd expect such things to be specified either

• in the tax treaty between Germany and India (German text of that tax treaty here).

• In the rules of the particular type of visum you work under.

• One point (not related to your visum, though) is that your one year contract could lead to you not being tax resident in Germany. This is decided not only by the number of days in each year you are in Germany but they can also take further circumstances into account (tax office calls this: finding where the center of your life/usual residency is). I've had my center of life stay in Germany while working outside Germany for a few years due to the nature of the contracts/work (university researcher - so some foreign experience is common and expected) while keeping some "everyday life infrastructure" such as banking accounts, a secondary residency etc. in Germany indicating that this was a temporary stage in my career.

In that case, not all your world-wide income would be subject to German income tax but only the wage.
Talk to the German tax office about that.

---

There are a number of tax deductions that while not being special for foreign workers may be particularly important for you (e.g. you can get a tax deduction for moving internationally in order to work here).
The local Lohnsteuerhilfeverein ("wage tax help association") may be a much cheaper possibility than a tax advisor to get information about that, though they may tell you that they cannot help you and you need a proper tax advisor.

Answer 2

You fill out your tax returns for the two tax years during which you worked.

You will have to tell them your total income in Germany during the tax year, and the total income outside Germany during the text year. That sum is used to calculate the percentage of tax you pay, and that is applied to your German income.

If you worked say July to June, and made €5,000 a month, it is quite possible that your employer deducted tax at the rate that would be correct for someone making €60,000 a year. But if you only made €10,000 outside Germany, your tax percentage will be calculated for someone making €40,000 a year, so you will get money back. And the same for the next year.

You can do the 2018 tax return right now, and submit the 2019 tax return on Jan 1st 2020.

Giving them incorrect information for your income in India would be tax evasion. A worse offense is acting as if the guys at the Finanzamt are stupid. They have seen it all. If you cheat they will know, so fill out all forms honestly.