Social security contributions
As of 1 January 2024, the income ceiling for mandatory pension insurance has increased from 87,600 euros (EUR) to EUR 90,600 (EUR 89,400 in the new federal states). The adjustment of the contribution ceiling is also applicable to unemployment insurance.
Additionally, the income ceiling for mandatory health and long-term care insurance in 2024 has increased to EUR 5,175 per month (EUR 62,100 per year).
The 2024 contribution rate to German state unemployment insurance will remain 2.6% compared to 2023. The rate for pension insurance is 18.6%. The contribution rate to the health insurance system is fixed at 14.6% and the rate for nursery care insurance at 3.4%. All mentioned rates are shared equally between employer and employee.
Reductionofsolidarity surcharge tax
As of 1 January 2021, the application of the solidarity surcharge tax has been substantially reduced. In general, no solidarity surcharge is levied any longer for individuals filing separately and having an income tax burden of not more than EUR 18,130 (approximately equivalent to a taxable income of EUR 68,413) as well as for married filing jointly taxpayers with an income tax burden of not more than EUR 36,260 (approximately equivalent to a taxable income of EUR 136,826). Where the aforementioned thresholds are exceeded, a sliding scale is used so that the top 5.5% solidarity surcharge would eventually only apply in full for individuals filing separately and having a taxable income of approximately EUR 105,500 or married filing jointly and having a taxable income of approximately EUR 211,000. The full rate of solidarity surcharge is applied on capital investment income subject to lump sum taxation and on employment income taxed at lump sum rates.
COVID-19 reliefs
A number of COVID-19 relief measureswere enacted in 2020. These encompass the possibilityfor an employer to grant a tax-free employment payment or benefit up to a total ofEUR1,500 until 31 March2022 and to pay a tax-free uplift within a limited range to the short-time work allowance until 3 June 2022.
The maximumamount of loss carryback for income tax purposes was increased to EUR10 million (single filing) / EUR 20 million (married filing) for tax years 2020, 2021, 2022, and 2023. In 2024, the amount limits were returned to the legal status prior to 2020 of EUR 10 million to EUR 1 million (single filing) / of EUR 20 million to EUR 2 million (married filing).
For dependent children, a one-time cash bonus of EUR 300 per child in 2020, of EUR 150 per child in 2021, and of EUR100 per child in 2022 is paid.
A home office lump sum expense of EUR 5 per day for a maximum of 120 days per calendar year may be claimed for tax purposes in 2020, 2021, and 2022. In 2023 and 2024, the lump sum expense increases to EUR 6 per day for a maximum of 210 days per calendar year. The limit of EUR 600 for the entire year has been lifted to EUR1,260.
The filing deadline for 2021 income tax returns was extended until 31 August 2023 for those taxpayers assisted by a professional tax adviser. The filing deadline for 2022 income tax returns was set for 2 October 2023. For those taxpayers assisted by a professional tax adviser, the submission deadline has been extended to 31 July 2024. For the 2023 income tax returns, the deadline is 2 September 2024 (2 June 2025 if tax advisor is instructed). From 2024, the regular deadline of 31 July of the following year (28 (29) February of the second year following the tax year if tax advisor is instructed) applies.
Property tax
As the current system of the property tax has been declared unconstitutional by the German Federal Constitutional Court, property tax will be levied on the basis of the new law from 1 January 2025 onwards. Therefore, all real property must be revalued. Relevant data is currently collected from the owners of the real property by the tax authorities. The declaration to establish the value of the real estate tax must be submitted by 31 January 2023.
