Expats living and working in Germany will require a tax identification number. The Federal Central Tax Office issues this unique number to everyone who is registered in Germany in order to handle taxes. Read this article on why do you also need a tax identification number in Germany
The German tax identification number consists of eleven digits; it is unique and is valid for a lifetime: Anyone registered in Germany is automatically assigned a tax identification number. This includes all the important data on a person: day and place of birth, gender, family name, first name, previous name, doctoral degree, current or last known address, responsible tax authorities and even the date of death.
This is how you get your tax identification number
How to get your tax identification number: Since 2008 the Federal Central Tax Office has been sending an individual identification number to every person registered in Germany by post. Babies usually get their number within three months of being born.
For this you need the tax identification number: It is best to include your identification number in the subject of applications, declarations or notifications to the tax office. You also enter the eleven digits in your tax return.
Employers or social service providers such as health insurance companies and employment offices may ask for your tax identification number. They all use the number to transmit tax-relevant data to the tax authorities.
If you do not know your tax identification number: You can find the tax identification number on your annual income tax certificate or the most recent tax assessment. You can use this form to request the number from the Federal Central Tax Office.
The registration authority also knows your tax identification number. For data protection reasons, you will only receive the number by post.
The identification number helps
Child benefit – Since January 2016, recipients of child benefit have to give the family benefits office their tax identification number and that of their children. However, the family benefits offices already have most of the data thanks to an automatic report comparison. More on this in the child benefit guide.
Alimony payments – If you pay alimony – for example to your divorced spouse – and would like to deduct the amount from tax as a special expense, you must have the recipient’s tax ID since 2016. They must give you their tax identification number.
Fast data comparison – The tax identification number helps the tax authorities to quickly and easily access important personal data. For example, if you move to another city, the registration and tax offices exchange the data with each other. Your tax-relevant data can also be correctly assigned and passed on across national borders using the tax identification number.
Electronic income tax card – The tax identification number makes it possible for the electronic income tax card to be available in Germany since 2013. This enables employers to call up all tax-relevant data (so-called electronic wage tax deduction features) directly from the Federal Central Tax Office. This means that employees no longer have to worry about their data being saved or their income tax certificate arriving at the employer’s HR department.
Electronic tax return – The electronic tax return is also possible thanks to the tax identification number. Data is checked for formal correctness as soon as it is entered. This means that tax offices do not have to ask for information as often and can process tax returns more quickly.
Pre-filled tax return – Since the beginning of 2014, the tax authorities have been offering the “pre-filled tax return” (VaSt). This service is also known as document retrieval or “retrieval of certificates”. It makes it easier for taxpayers to fill out the income tax return on a computer.
Because master data such as name, address, age, religious affiliation, bank details, pension payments, contributions to health and long-term care insurance and other pension expenses can be transmitted digitally and thus automatically included in the tax return.
The taxpayer must create an Elster account for this. To do this, he registers on the Elster portal with his tax ID. In order to be able to call up this data, he either needs a free program such as the Elster form provided by the tax offices or a tax program that is subject to a fee.
Required for exemption order
For your bank details, for example, you have needed the tax identification number for an exemption order since 2011. In this way, investment income can be assigned to individual persons and it is more quickly apparent when the exemption of 801 euros, the so-called saver lump sum, is exceeded.
If the tax identification number is missing in the exemption order, since 2016 credit institutions have automatically withheld the withholding tax on interest payments and other capital distributions. That is 25 percent of the investment income, plus the solidarity surcharge and possibly also church tax.
All banking and insurance customers who have not yet communicated their tax identification number to their bank are affected. As a rule, this applies to exemption requests submitted before 2011.
Criticism of the tax ID
Civil rights objections: Civil rights activists fear that the database at the Federal Central Tax Office can also be used for purposes other than tax. According to the current legal situation, however, only the tax office can access data from the Federal Central Tax Office.
Tax number as a personal identifier: Since the tax identification number can be clearly assigned to a person, it is theoretically possible to compare all databases in which it is stored. In this way, all information about the life of a citizen would be accessible in one fell swoop. Nevertheless, the storage of personal data is legal, ruled the Federal Fiscal Court (BFH, judgment of January 18, 2012, Az. II R 49/10).
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