A fair and affordable alternative to tax advisers
in Germany: the Lohnsteuerhilfeverein

By Elisa Stella of ELP-Expat: Expatriate Support

One of the most common questions I get from expats all around Germany concerns filing a German income tax declaration (Einkommensteuererklärung) and finding a good tax adviser. But not everybody needs to file a German income tax return, and not everybody needs to hire a tax adviser.

Who Needs to File a German Income Tax Declaration?
In general, if you earn less than about 8,000 euros annually (the exact amount changes every year), or if you have no expenses to deduct, then save your time and avoid the paperwork. Income tax filing is not compulsory for you.

However, many employees benefit from a tax refund after filing their German income tax declaration. This happens because their income tax (Lohnsteuer) is deducted monthly from their gross salary, and they can get a refund for certain expenses. If during the tax year they incur expenses (auto, dentist, daycare, etc.) that reduce their taxable income, they can get a tax refund.

Moreover, you can also do the income tax declaration for the past 4 years, so even if you didn’t know about the benefits of filing an income tax declaration in Germany before, you can still get the refund retroactively!

Unlike freelancers, the self-employed and entrepreneurs, most regular employees, wage-earning trainees, and pensioners do not need a tax adviser. They can rely on so-called Lohnsteuerhilfe Vereine (income tax assistance associations), which are non-profit organizations providing tax advice and financial consulting for a fair fee. Depending on their income bracket, clients become members of Lohnsteuerhilfe Vereine just paying a fee that varies from 40 to 350 euros per year approximately. Definitely a good deal!

Even though they are much cheaper than commercial tax advisers, they provide exactly the same high-quality service for their clients. How can they do that? Lohnsteuerhilfe Vereine are not profit-driven, but they employ qualified financial professionals, and every Lohnsteuerverein is subject to the strict German regulation and quality standards of the Oberfinanzdirektion (chief tax administrative office). There is also a DIN (Deutsche Industrie Norm) regulation that defines their operations.

A Lohnsteuerhilfe Verein assists you with tax issues throughout the year, helps you file your annual income tax declaration, calculates your refund (if any), and manages correspondence with the Finanzamt for you. If necessary, they can even support you should any legal or fiscal issues arise. All this is definitely a great relief for anyone struggling with German bureaucracy and complicated notifications from the Finanzamt!

There are plenty of Lohnsteuerhilfe Vereine in just about any city. Most of them are part of national networks, and some of them also provide services in English. (Otherwise, you should hire an interpreter, which is still cheaper than a tax adviser.) Below is a list of some German Lohnsteuerhilfe networks. Search for the office closest to you and ask for English-speaking personnel.

• VLH.de (Lohnsteuerhilfeverein Vereinigte Lohnsteuerhilfe e.V.) – more than 3,000 offices and 950,000 clients/members
• Lohi.de (Bayern) – about 600,000 members/clients in Bavaria
• Steuerring.de – some 1,100 offices across Germany

Note: I am NOT a tax adviser, but I support my clients in preparing all necessary documents for a successful income tax declaration. If needed, I also interpret for them during appointments at Lohnsteuerhilfe Vereine or commercial tax advisers.

For a customized, personal consultation, do not hesitate to get in touch with me:

• Email: Elisa at ELP-Expat (Subject: GW Tax Help article)
• ELP-Expat Website: www.elp-expat.com

Part of the GW Expat ‘How To’ Guides, our step-by-step guides for expats living and working in German-speaking Europe