Many expats living and working in Germany will use ELSTER to do their taxes online, especially those who are freelancers or self-employed.
What is ELSTER (Elektronische Steuererklärung)?
ELSTER (ELektronische STeuerERklärung = electronic tax declaration) is a German online tax office system designed by the Federal Central Tax Office (Bundeszentralamt für Steuern) to enable anyone to submit their tax returns online.
If you are a freelancer or own your own business, you are most likely obliged to use ELSTER (along with around 90% of businesses in Germany) to submit monthly VAT returns and employee tax statements.
An increasing number of private individuals are also using ELSTER to submit their annual tax returns and request tax refunds: doing so online saves having to print out and post your tax forms to your local tax office (Finanzamt). If you regularly do your tax returns online, ELSTER can also automatically retrieve a lot of your personal information, making the process a lot faster.
How to register with ELSTER
Before you can use ELSTER to submit your annual tax return, you need to register for a free account. To do this, visit the ELSTER website and click the button that says “Benutzerkonto erstellen” (create an account). The online application form is fairly simple but it is all in German. This step-by-step guide walks you through the registration process.
1. Choose your login-method
For this first step, you need to select how you would like to log in in the future. For most people a Zertifkatsdatei (digital signature) is the best option - it is free and simple to use. There are other (paid) options for business owners or tax advisors, which you can always opt for at a later stage if needed. Select “Zertifikatsdatei” and click the button that says “Auswählen”.
This page asks you to specify whether your registration is a personal account (or a joint account with your spouse), or an account for any kind of business structure.
3. Personal information
Enter all your personal information, including:
- Email address
- Date of birth
- Tax ID
- Preferred username
4. Participation in pre-filled tax return
You will be asked to confirm whether you consent for the tax office to prepare pre-filled tax returns for you (vorausgefüllte Steuererklärung or Belagabruf). This can greatly speed up the process of submitting your tax return by automating much of the information required to complete a tax return. If you consent, you give permission for the tax office to collect personal information from your employer and social security schemes about:
- Your salary
- Your income replacement benefits (such as unemployment benefit or sickness benefit)
- Your pension benefit payments
- Your contributions to statutory insurance schemes
- Your contributions to pensions
5. Confirm your email address
Once you have submitted all your personal data, you will receive a confirmation that your registration is being processed. You will be asked to verify your email address. Click the link in the email to do so.
6. Activate your account
You will receive an email with an activation code in it. Keep this safe while you wait for another activation code to be sent to the address where you are registered. It will arrive in the post within 14 days. Once you have it, open your activation email and click the link to be taken back to the ELSTER website. Enter both the activation codes you received by email and by post.
7. Get your Zertifikatsdatei
After you have successfully activated your account, a digital signature (Zertifikatsdatei) will be automatically generated for you. Download this and keep it somewhere safe on your computer (it may also be worth saving it on a USB stick, as you will need it every time you want to log in to ELSTER).
You can now log in for the first time by clicking the button that says “Durchsuchen” (browse) to locate your downloaded Zertifikatsdatei on your computer and entering your password.
How to use ELSTER to complete your annual income tax return
Once you have logged in to ELSTER using your Zertifikatsdatei and password, you are taken to your “Mein ELSTER” (My ELSTER) homepage where you can see which tax return forms you are required to submit (if you are obliged to complete an income tax return). If you are voluntarily completing a declaration, under the menu “Forms” (Formulare) you can access digital copies of all the forms you need for your annual tax return.
Click on “Einkommenssteuer” (income tax) and then “Einkommenssteuererklärung” (income tax return). You will see a list of all the possible income tax return forms. If you are not sure which forms you need to fill out, our Annual income tax return page provides an overview of what the different forms are for.
You will usually be required to complete some (or all) of the following. If you are ever unsure of what information is being asked for, there is a small question mark next to the statement which will provide further clarification if you click on it.
1. General tax form
Fill in the “Hauptvordruck” (general tax form) with details of your income, German bank account, and any deductible expenses such as pension contributions or donations. If, when you registered, you chose to participate in pre-filled tax returns, a lot of this information should already be filled out; if not, you can find this information on the employment tax statement (Lohnsteuerbescheinigung) issued to you by your employer at the end of the financial year.
2. Additional tax forms
Fill out any necessary Anlagen (additional tax forms). Which ones you need to fill out depends on the different types of income you receive, and whether you want to make any tax deductions. You may also be required to attached receipts or proofs for any expense deductions you are making.
3. Check and submit
Once you have filled out all the necessary fields on all your forms, a small green tick will appear next to each section. Check that the information you have provided is correct. It is also possible to grant access to a tax advisor so that they can double-check as well. Click to submit and your information will be securely transferred to the tax office. As soon as it has been received, you will receive a confirmation in your ELSTER inbox.