(2023) What are family-related tax allowances?

Individuals residing abroad who earn and pay tax on the vast majority of their income in Germany can, under certain conditions, apply to be treated as fully liable to income tax in Germany (so-called cross-border commuters according to § 1 para. 3 EStG).

If you are a citizen of an EU/EEA member state and your spouse or child resides in an EU/EEA member state, you can benefit from family-related tax advantages:

• Joint assessment with the splitting tariff or wage tax deduction according to tax class III.
• Doubling of spouse-related allowances and maximum amounts: special expenses allowance, maximum pension amount, saver’s allowance.
• Relief amount for single parents. Maintenance payments to the divorced or separated spouse within the framework of real splitting.

If you wish to be treated as fully taxable from the beginning of the year or the start of employment, apply for a "Certificate under § 39c para. 4 EStG" from the employer's business premises tax office and present it to the employer. This certificate includes the relevant tax class, the number of child allowances, and, if applicable, a wage tax allowance. To apply for this certificate, use the "Application for wage tax reduction" and attach the "EU/EEA cross-border commuter annex".

This annex requires you to provide your expected domestic and foreign income and, if applicable, that of your spouse, and have it confirmed by the tax authority of the country of residence. You must include the "EU/EEA certificate" with your income tax return: This form requires you to declare income taxed abroad - including that of your spouse - and have it confirmed by the tax authority of the country of residence.