Income Tax in Germany

Individuals are subject to German income tax

Income tax ("Einkommensteuer") is applied to the entire income of individuals, depending on the place of residence or habitual residence.


Foreigners are usually only subject to income tax with taxable German income. Partnerships are not directly taxed, but the income of a partnership is determined for the partnership as a whole and is then directly distributed to the partners for income tax purposes . 


The types of income for income tax purposes are set out in the income tax act ("EStG - Einkommensteuergsetz)


1 Income from agriculture and forestry

2 Income from trade or business

3 Income from self-employed work

4 Income from employed work

5 Income from capital assets

6 Income from renting and leasing

7 Other income


Revenues outside these types of income are not controllable as e.g. a lottery or gambling winnings.


The taxable income is determined  and taxed. The tax rate is rising with increasing taxable income and goes up to 42% (from EUR 52.882), and a maximum rate of 45% ("wealth tax" from EUR 250.731).


Also, the solidarity surcharge is applied on income tax.


The wage tax is a special application of the income tax.



Income tax table Germany 2016
Income tax table for Germany for the year 2016
Adobe Acrobat Document 174.0 KB

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