🇩🇪 Taxes in Germany · For investors
Taxes in Germany
How Germany taxes residents and non-residents, and how personal income tax rates work.
All resident individuals in Germany are taxed on their worldwide income. Non-residents are taxed, generally by withholding, only on German-source income.
Taxable income categories
Taxable income covers income from seven categories: agriculture and forestry, trade or business, independent professions, employment, capital investments, rents and royalties, and other income subject to tax laws.
Net income and taxable income
Net income is calculated from all gross income received during the calendar year, reduced by income-related expenses for the same period, for each of the categories above. Losses from one of the seven major income categories (other than capital expenditures) may be offset in full against positive income from another category, with exceptions for other income.
Taxable income is total income after category deductions, further reduced by lump-sum deductions or, within limits, actual payment of special expenses defined by tax law.
Personal income tax rates
Germany applies progressive tax rates that start at 14% and geometrically rise to 42%. These rates are adjusted regularly.
Exact tax treatment depends on your income structure. On a free consultation we review your situation.
What to know about German taxes
Progressive rates
Personal income tax rates start at 14% and rise geometrically to 42%.
Worldwide income for residents
Resident individuals are taxed on their worldwide income; non-residents only on German-source income.
Seven income categories
Taxable income spans agriculture, business, professions, employment, capital, rents and royalties, and other income.
FAQ
What is the personal income tax rate in Germany?
Are non-residents taxed on worldwide income?
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