Money
Steuererklärung: tax return for Indians in Germany
DTAA, Steuer-ID vs Steuernummer, what to claim, which app to use, and when you actually need a Steuerberater.
German tax returns are worth filing even when not required. Employees on tax class I typically get refunds. Key deductions: commute (€0.30-0.38/km one way), home office (€6/day), work equipment, professional training, and relocation costs in the first year.
German tax law is complex but the tax return for most salaried employees is surprisingly doable yourself. Indians arriving in Germany almost always get a refund in their first year (roughly €800 to €2,000) because the system overtaxes you on paper then refunds based on your filing.
The numbers you need
Steuer-ID (Identifikationsnummer): 11 digits. Permanent. Assigned once when you do Anmeldung. Arrives by post 2 to 3 weeks later. Use this on tax filings and employer forms.
Steuernummer: 10 to 13 digits depending on state. Assigned by your local Finanzamt (tax office) when you start your first tax return. Used on tax correspondence. Different from Steuer-ID.
If you lose your Steuer-ID, the BZSt website has a recovery form that mails it to your registered address.
Tax classes (Steuerklasse)
Germany assigns every worker a Lohnsteuerklasse (wage tax class):
- Klasse 1: single, or married with spouse abroad
- Klasse 2: single parent
- Klasse 3: married, higher earner (spouse is in 5)
- Klasse 4: married, both spouses earning similarly (default for married couples)
- Klasse 5: married, lower earner (spouse is in 3)
- Klasse 6: second job
Indian employees arriving alone start in Klasse 1. When your spouse joins you and registers, you shift to Klasse 4/4. If one of you earns significantly more, filing a Steuerklassenwechsel (class change) to 3/5 reduces monthly withholding.
Who must file
You legally must file a Steuererklärung if:
- You have side income above €410
- Your spouse is Klasse 3 or 5
- You received Arbeitslosengeld, Kurzarbeitergeld, Elterngeld, or similar
- You had multiple employers in one year
- You claimed tax allowances (Freibeträge)
You should file even if not required, because you almost always get money back.
The DTAA: Double Taxation Avoidance Agreement
India and Germany have a tax treaty. What it means for you:
- Indian income (rental from property in India, interest from Indian banks, dividends from Indian stocks) is taxable in India first. You declare it on your German return; Germany gives you credit for Indian tax already paid.
- German salary is only taxed in Germany. You declare it in India on your Indian return, but the treaty means you do not double-pay.
- You remain an Indian tax resident if you spend 60+ days in India in a year AND 365+ days in the preceding 4 years, OR 182+ days in the current year. Most new arrivals become German tax residents and Indian non-residents or RNOR (resident but not ordinarily resident) within their first few years.
Consult a CA on your Indian side for the India-side filing. German side is separate.
What you can claim
Werbungskosten (work-related expenses):
- Commute to work: €0.30/km for the first 20km, €0.38/km from km 21 onwards (one way only, per working day)
- Home office: €6/day up to 210 days
- Work phone, laptop, books, professional training
- Work clothes (if required and non-everyday)
- Moving costs for a job (Umzugskostenpauschale)
Sonderausgaben (special expenses):
- Contributions to German pension (Riester, Rürup)
- Private health insurance premiums
- Donations
- Church tax (if applicable)
Außergewöhnliche Belastungen (extraordinary expenses):
- Unreimbursed medical costs
- Support payments to dependents in India (Unterhalt an bedürftige Personen) with specific documentation; this is where many Indian taxpayers save meaningfully
Which app to use
ELSTER: the official government tool. Free, German-language, functional but ugly. Works for any situation. mein-elster.de.
WISO Steuer: around €30. Much better UX than ELSTER. Covers most situations, handles DTAA declarations. German interface but clearer.
Taxfix: English-language, €40 to €50 per filing. Chat-style interview. Good for simple tax situations (one salaried job, no side income). Limited for complex cases.
Steuerbot: similar to Taxfix, also English-friendly.
Smartsteuer, Buhl: mid-market desktop/online tools.
For your first filing with DTAA and family dependents, WISO Steuer is the sweet spot. For very simple cases (single Blue Card holder, salary only), Taxfix is fast.
When to hire a Steuerberater
Hire a certified tax advisor if:
- You are a freelancer or self-employed in Germany
- You have rental properties in India
- Your total worldwide assets include anything complicated (trusts, NRO accounts with significant balances, Indian business ownership)
- Your first filing flagged issues you do not understand
Steuerberater fees are regulated by the Steuerberatergebührenverordnung. A simple employee filing runs €200 to €500. Complex filings with DTAA and foreign assets can hit €1,000+.
The filing timeline
- Tax year = calendar year
- Deadline = July 31 of the following year (if self-filing). Extended to end of February two years later if using a Steuerberater.
- Refund arrives 6 to 12 weeks after Finanzamt processes your filing
For new arrivals
If you moved to Germany mid-year, you file a partial-year return. You almost always get a refund because wage tax withholding assumed you would earn for the full year. Claim:
- Moving costs (flights, shipping, first flat setup) as Werbungskosten
- Home search trips if documented
- First month's temporary accommodation
- Language class fees if required for your job
A first-year refund of €1,500 to €3,000 is common.
Want a Steuerberater who understands Indian tax situations? Browse tax advisors in the directory →
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