Taxation of spouses in Germany

In Germany resident spouses will be jointly assessed for income tax purposes unless they opt for seperate assessment. Joint assessment decreases the tax burden if one spouse’s income is highrer than that of the other spouse. If a spouse qualifies for special deductions or allowance these can be deducted from the joint tax base.

The joint assessment requires that both spouses are tax resident in Germany. However, a German resident who is citizen of an EU- or EEA-memberstate can opt for joint assessment if his or her spouse is resident in another EU-memberstate or Norway, Iceland or Liechtenstein.

Example: A is a UK-citizen who lives and works in Germany. His wife lives in the UK. He has a salary of 140,000 €. His income after deductions and allowance is 120,000 €. The spouses do not have any other income.

A has to pay about 44,500 € if he chooses single assessment. Joint assessment leads to a tax burden of about 35,800 €.

Note: Income tax assessment is different from all self-assessment systems. For more information click here.

Author: Peter Scheller, German Tax Adviser – Master of International Taxation