Tax classes

If you work in Germany, you will be placed in a so-called tax class, just like the residents of Germany. This tax class determines the amount of tax to be deducted from your salary. Tax classes in Germany are based on marital status (married or unmarried) and, in the case of married couples, on the income of the partner. Each tax bracket has a tax table that takes into account the amount of income. In Germany there are progressive taxes, i.e. the higher your income, the more tax you pay.

Which tax bracket

To determine your tax class, it is important to know whether you have limited or unlimited tax liability in Germany. Basically, you have a limited tax liability because you are not a resident of Germany and have tax class 1. To be treated the same as a resident of Germany, you must meet the requirements and can opt for unlimited tax liability:

  • 90% of your world income is taxed in Germany, or
  • your foreign (Dutch) income is less than €9,744 gross (in 2021).

If you meet one of these conditions, you have unlimited tax liability. If not, you have limited tax liability, you are in tax class 1 and do not have to file a tax return. Ask the tax office or a tax advisor whether it makes sense to file a tax return anyway.

Tax class 3

If you meet one of the conditions, you can file a tax return in Germany as if you lived in Germany. If you meet the conditions for unlimited tax liability, you can also be taxed in tax class 3 under certain circumstances. This is the case if you are married. Partnership agreement (samenlevingsovereenkomst) and registered partnership (geregistreerd partnerschap), with the exception of same-sex partnerships, do not count.

If you work in Germany and are married and meet the requirements for unlimited tax liability, you can opt for tax class 3. You must note that if you are placed in tax class 3, you are obliged to file a tax return in Germany. It is also important that the Dutch income for you and your married partner is taken into account when determining the tax rate on your German salary. This means that choosing tax class 3 only makes sense if your married partner has no income or a (very) low income. If your partner has an income, it is advisable to opt for tax class 1 and reclaim the income tax that was overpaid with your tax return. If your partner’s Dutch income is not certain, it is advisable to opt for limited tax liability in Germany and possibly file a tax return in Germany afterwards. In this case, you will be placed in tax class 1 and will only have to file a tax return if it is financially advantageous for you.

If you file a tax return in Germany, you will need a completed EU/EEA certificate. You can download the form below. You must complete this form yourself and have it checked and stamped by the tax authorities in Heerlen:

  • Belastingdienst Buitenland
    Postbus 2865
    6401 DJ Heerlen

To summarise:

  • In principle, you will be placed in tax class 1. If you meet the requirements for tax class 3, you can also be placed in this tax class.
  • The classification in the tax class is only important to determine which wage tax has to be withheld monthly. In the case of a tax return, the final tax is then determined.