Germany is a fantastic place for expats to work and live, but navigating the country’s tax and accounting system can be overwhelming. Whether you’re a freelancer, an employee, or a business owner, understanding accounting services in Germany is essential to staying compliant and optimizing your finances.
This guide will walk you through everything you need to know about accounting services for expats in Germany—from tax obligations to finding the right accountant.
1. Why Expats in Germany Need Accounting Services
Germany has a complex tax system, and even small mistakes can result in penalties. Here’s why you should consider professional accounting support:
✅ German Tax System Complexity – Tax rates, deductions, and filing procedures differ based on employment status.
✅ Language Barrier – Most official tax documents and regulations are in German.
✅ Mandatory Tax Filings – Even if you’re an employee, you may be required to submit a tax return (Steuererklärung).
✅ Tax Optimization – Accountants help identify deductions and credits to reduce your tax liability.
✅ Avoiding Penalties – Errors in tax filings can lead to fines or back payments.
2. Understanding the German Tax System for Expats
A. Types of Taxes Expats Must Pay
1. Income Tax (Einkommensteuer) – Progressive tax system ranging from 0% to 45% based on income.
2. Church Tax (Kirchensteuer) – If you’re a member of a registered church, you pay 8-9% of your income tax.
3. Solidarity Surcharge (Solidaritätszuschlag) – Additional tax on higher incomes (eliminated for most taxpayers in 2021).
4. Trade Tax (Gewerbesteuer) – Applies to business owners and freelancers in certain professions.
5. Value-Added Tax (VAT or Mehrwertsteuer) – Standard rate of 19% (or 7% for certain goods/services).
B. Do You Need to File a Tax Return?
Expats must file a tax return if:
✔️ You have multiple income sources (e.g., freelance + employment).
✔️ You earn over €410 per year from self-employment or rental income.
✔️ You are married and want to file a joint tax return for benefits.
✔️ You want to claim tax refunds (e.g., work expenses, relocation costs).
3. Choosing the Right Accountant in Germany
When selecting an accounting service in Germany, consider:
A. Types of Accounting Services Available
🔹 Tax Consultants (Steuerberater) – Certified professionals who handle tax filings, deductions, and financial planning.
🔹 Bookkeepers (Buchhalter) – Manage invoices, expenses, and bookkeeping but cannot offer tax advice.
🔹 Specialized Expat Tax Services – Firms catering specifically to expats, offering bilingual support.
🔹 Online Tax Tools – Platforms like SteuerGo, Wundertax, or Taxfix help with self-filing.
B. Key Factors to Consider
• Language – Choose an English-speaking accountant for clarity.
• Expertise – Look for specialists in expat taxation.
• Pricing – Costs range from €300 to €1,500+ per year, depending on complexity.
• Availability – Some accountants have long wait times, so book early.
4. How to Optimize Your Taxes as an Expat in Germany
💡 Tax Tips for Expats:
✅ Claim Work-Related Expenses – Internet, office supplies, professional courses, and even your home office may be deductible.
✅ Check Double Taxation Agreements (DTA) – Germany has DTAs with many countries to prevent double taxation.
✅ Use Lump Sum Deductions (Pauschbeträge) – Automatic deductions for work-related expenses without needing receipts.
✅ File Your Tax Return on Time – Deadlines are usually July 31st of the following year (or later if using a tax consultant).
✅ Consider Voluntary Tax Returns – If not required to file, you can still do so and claim refunds for up to 4 years.
5. Best Accounting Services for Expats in Germany
Here are some reputable accounting services for expats:
Freelancers & Small Businesses
• Sorted – Online accounting tool with English support.
• Kontist – Banking and accounting solutions for freelancers.
• Expattax – Specialized in tax returns for expats.
Employees & Individuals
• Taxfix – App-based tax return filing in English.
• Wundertax – Helps expats file taxes online.
• SteuerGo – Affordable online tax return services.
Full-Service Accounting Firms
• ML Tax Solutions – English-speaking tax advisors.
• Schlun & Elseven – Law and tax firm assisting expats.
• Ecovis – International accounting and tax consulting.
Final Thoughts
Navigating German accounting as an expat doesn’t have to be stressful. Whether you’re a freelancer, employee, or business owner, having the right tax knowledge and accounting support can save you money and ensure compliance.
💡 Key Takeaways:
✔️ Germany’s tax system is complex, so professional guidance is recommended.
✔️ Expats can benefit from tax deductions, refunds, and DTAs.
✔️ Choose an English-speaking tax consultant or use expat-friendly online tools.
✔️ File on time to avoid penalties and maximize refunds.