Tax refund after leaving Germany

Question

I am Italian and last year I worked 6 months in Germany. Therefore I paid the taxes in Germany. I have heard that if you stay in Germany less than one year you may reclaim the tax refund.
Is it true?
If this is the case, how can I achieve it?
I worked at a university: who/what should I ask for it?
I have all required document (tax statements)

I have seen there is already an open question on StackExchange (German tax refund after moving abroad), but it does not helps me out with my problem.

Answer 1

All you need to do is to make Steuererklärung (regular yearly tax declaration) in the year after you left Germany. Since you were working in Germany for only half a year, it is certain that tax rate that they used to calculate your monthly taxes is much higher than your actual tax rate for the whole year due to progressive taxation, so you'll get back a part of the tax money you payed. The tax declaration is fairly simple for employees if you know enough German.

The other issues is retirement money. You may get back retirement contributions that you paid in Germany if you opt out of German retirement scheme, but you'll have to pay some additional tax on that too. I don't know what is the legal limit there.

In general, it would be good to talk to a good German tax advisor (Steurberater). They are expensive, but can make this topic hassle-free for you.

EDIT: Of course, the whole issue could be even more complex if you take into account your tax liability in Italy, and possible taxation of foreign income, either in Germany or Italy. Again, good tax advisor familiar with both Italian and German regulations could find you a way out with least taxes, but I have no idea where you could find one.

Answer 2

You may reclaim all or some of the taxes depending on several things, for example how long you stayed in Germany and whether you worked in Italy for the rest of the year.

Did you have other income from your home country?

If you had income in your home country, that affects your tax bracket. Thus you must declare all your worldwide income in the Germany tax return.

If you were unemployed for half of the year, but your tax bracket was calculated based on 12 months salary, you should file the tax return to reclaim some of the taxes.

Should you pay taxes to Germany on your worldwide income?

From which income you pay taxes in Germany, depends on whether you lived in Germany for only 6 months, or stayed longer.

If you lived in Germany for more than 6 consecutive months, you are considered "ordinarily resident" in Germany, meaning that the tax is calculated from your worldwide income (the total you earned in Germany and your home country).

If you lived in Germany for only 6 months (or less), you are not considered tax resident. You pay tax only on income earned in Germany. In this case you will be considered tax resident in your home country.

Source:
https://europa.eu/youreurope/citizens/work/taxes/income-taxes-abroad/index_en.htm
https://europa.eu/youreurope/citizens/work/taxes/income-taxes-abroad/germany/index_en.htm

Have you paid taxes twice?

Another thing is that you may end up paying taxes on the same income to both Germany and your home country. In this case the double taxation treaty between your home country and Germany defines which country has the right for taxation, and one of the countries should return the collected taxes.

Source:
https://www.settle-in-berlin.com/income-tax-germany/how-to-do-avoid-double-taxation-germany/

For example, if your home country has the right for taxation, but you were taxed from the same income in Germany as well, you would reclaim the taxes collected in Germany. You need to provide a proof from the tax officials of your home country that you paid the taxes there. You probably won't get such a certificate already in May, when you normally file the tax return in Germany, but in practice the German tax return can be filed until the end of the year. (This is what I heard from a tax consultant.)

Which country has the right for taxation depends on the treaty. While I don't know about the treaty between Germany and Italy, I have learned that the treaty between Germany and Finland says that you pay taxes to the country where you work. As an exception, if you work in Germany but your employer is not a German company, it gets more complicated.

How can you reclaim a tax refund?

The only way to reclaim taxes is by filing a tax return. You can do this by going to Finanzamt, online, or by using a tax consultant ("Steuerberater"). If you choose to do it online, the state provides a free service called Elster that is only available in German. There are other commercial services that are available in English and provide also help for filling each form. In case of more complicated issues, such as double taxation, it may be safer to use a tax advisor. The tax consultants have a fixed price list - one tax return costs 150 € + 19 % VAT in 2018.

Note that while you may see instructions that advise you to fill the form N-AUS to report foreign income, this only applies to foreign income while you're a resident in Germany. If you worked in your home country before or after moving to Germany, you just report the foreign income in the beginning at WA-ESt. SteuerGo asks this at the end in Other Information.