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Germany - Tax System

Germany has reportedly the highest percentage of income tax in the world. In addition to the tax that funds public services and politicians' pockets there is "Solidaritätszuschlag", a supplement to support the rebuilding of former East Germany, "Kirchenlohnsteuer" which goes to the religion you nominate on your tax card (you can nominate none and this tax will not be extracted) and "Sozialversicherungsbeiträge" a national insurance premium for the public pension scheme and for the public health insurance scheme.

"Taxable income" is computed by deducting special expenses from your gross income, i.e. deducting allowed personal expenditures, social security contributions, health and life insurance premiums, etc.

The German financial year sensibly follows the calendar year. The general tax declaration "Lohnsteuer-Anmeldung" is due to be filed by the 31st of May the following year. If you have a tax advisor "Steuerberater", then this deadline can be extended to the end of September, and the tax advisor files on your behalf.

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