Taxation in Germany

The government is reviewing the provision for a three-year income tax exemption for vacant properties and those withdrawn from short-term rentals. Concerns have been raised during the public consultation phase that the current requirements are too stringent and may reduce the measure’s effectiveness.

The new tax bill that settles a number of issues, such as the tax exemption for empty properties returning to the market, is being put to public consultation this week.

Taxpayers whose presumed income is higher than their actual income have two months to find ways to avoid paying additional tax. Taxpayers can claim income, loans received, lump sums, compensation, and gambling winnings to avoid the presumption.

The practice of declaring losses or meager income, according to an analysis of their tax return data continues. Those who appear by far the most penurious to the IRS are bar owners, followed by restaurateurs and those who own car repair shops.

The fee for practicing a profession ("telos epitidevmatos") will be abolished in 2027 for businesses and the self-employed with invoice books ("blokaki") with up to three employers who are taxed as employees.

With targeted audits and extensive cross-checks of myDATA and data from courier companies, auditors from the Independent Public Revenue Authority identified, in the first half of 2024, more than 52 businesses that make sales online but do not declare the revenue from them, as they do not issue the relevant invoices or receipts.

For the first time this year, the average income tax paid by freelancers surpasses that of salaried employees, who (along with retirees) are usually the tax burden bearers.

Electronic payment methods and real-time monitoring of expenses and revenue streams have made individuals and corporations more likely to pay their dues in time, data from the Independent Authority for Public Revenue show.

The Ministry of National Economy and Finance has announced a one-day extension to the deadline for filing tax returns.

Specifically, millions of individuals have until August 2 to correct any errors or omissions on income tax returns they have already filed, if they submit amended returns by that date.