The German tax system is one of the most complicated in the world. However, we will try to explain to you the basic issues concerning your stay at KIT and what you have to keep in mind in terms of taxation.
Research Visit Based on an Employment Contract
If your research visit is based on an employment and will last for a period longer than six months you will be liable to German taxation. One of the most important taxes is the so-called `Einkommensteuer´ (Income Tax). It is directly deducted from your monthly payments. The amount of income tax you have to pay depends on your marital status, your income, and your tax bracket.
At the beginning of your employment you will have to hand in a so-called `Bescheinigung für den Lohnsteuerabzug 2011´ (Certificate for Income Tax Deduction 2011) to your employer KIT. This certificate contains all relevant data needed for taxation. If you have already been employed in Germany in 2010 please hand in the `Lohnsteuerkarte 2010´. Please note that from 2012 on, this `paper-based´ practice will be replaced by an electronic system.
Please click here to print out the application for the certificate for income tax deduction. The application can be handed in at the IScO in order to be processed.
Research Visit Based on a Fellowship
If your stay in Germany is based on a fellowship, you may be exempt from taxation under German income tax law. If your stay in Germany is financed by any other institution than KIT, please contact the respective institution that has awarded the fellowship to you. Please also keep in mind that your fellowship might be liable to taxation in your home country.
To be exempt from taxation in Germany your fellowship has to fulfill the following requirements:
- Award from public funds from a public or non-profit agency
- sponsoring research or academic or artistic training or continuing education
- no higher than the amount required to fulfill the research task or to cover living and training needs
- grant according to the regulations of the donor
- fellowship is not based on any kind of service by the holder
Double Taxation Agreements
In order to avoid being taxed in Germany and your home country numerous agreements on double taxation have been concluded with various countries. These double taxation agreements clarify the taxation situation of the respective taxpayers. The German Federal Ministry of Finance provides more detailed information on its website.
If you stay in Germany for less than three months, your income will be taxed in your own country given that you work for a foreign employer and the right of taxation was assigned to your home country in the respective agreement with Germany. If this is not the case, your salary will be taxed in Germany. Please note that according to some agreements university teachers and researchers may be taxed only in their home country if their stay in Germany does not exceed a certain period of time (depending on the respective agreement on double taxation).
After each calendar year it is possible to apply for an income tax adjustment (the so-called `Lohnsteuerjahresausgleich´) at the end of the year. Please note that this is voluntary as long as your income is based solely on income from employment. However, an income tax adjustment may provide you with a partial refund of the tax paid. You will find the necessary documents needed for the application at the local tax office or city hall. The deadline for submission of the application is May of the following year, at the very latest by December 31st. In case of a tax return you will receive a tax statement (`Steuerbescheid´) stating the refunding tax amount. Because completion of the income tax adjustment forms is rather difficult it may be advisable to consult a so-called `Steuerberater´ (Tax Accountant) who will handle your application for a fee corresponding to the amount of the taxed income. The database of the German association of tax accountants provides a list of contacts.
Alternatively, the income tax advisory service may provide you with a comparable service tax accountant’s offer. However, you have to be a member to profit from their service.
The state-collected church tax (`Kirchensteuer´) is a German singularity. In the case of the major churches (Roman Catholic, Lutheran, Reformed Protestant, various free Protestant churches as well as the Jewish community), the church tax is collected by the state together with the income tax and is therefore automatically deducted from your monthly payments. The church tax roughly amounts to an extra 9% of your income tax. If you are a member of the Anglican Church or an Orthodox Christian Community you will not be taxed.