Banking, Money and Taxes in Germany
Expats can easily open a bank account in Germany, and will find German banks to be among the most sophisticated and modern in the world. Online banking is an easy and a common means of making transactions and managing accounts. Expats opening an account should provide their residence card, proof of address within Germany and a passport.The major banks are Westdeutsche Landesbank, Bayerische Vereinsbank, Dresdner bank, PostBank, Commerzbank and DeutscheBank. Many international banks have branches in Germany and continuing an overseas account is sometimes the best option.
Expats must pay taxes on income derived from German sources. Higher incomes pay much more tax than lower salaries. Taxes are generally automatically deducted from the employee's pay cheque by employers.
The rate of income tax increases progressively from 0% to 45%. A solidarity surcharge (5.5% of income tax) also has to be paid. No income tax is charged on the basic allowance (€7,834 for singles, €15,668 for married couples). Germany has treaties in place with many countries to avoid double taxation of expats. Value-added tax (VAT) is 19%, with reduced rates on some foods and transport services.
Expat must obtain a tax card when they begin employment in Germany. Self employed persons must complete a tax return at the end of each tax year. Germany recognises double taxation treaties with most countries of expat origins.
