What is a Basic Tax-Free Allowance (Grundfreibetrag)?
The basic tax-free allowance (Grundfreibetrag) is an income amount that can’t be taxable. This is an amount that is enough for essential life. So, only income higher than the basic tax-free allowance is subject to income tax.
Every taxpayer is entitled to this annual basic tax-free allowance.
Every two years, the German federal government must determine the amount of basic tax-free allowance.
Basic Tax-Free Allowances for 2023, 2022 & Previous Years
Income tax is calculated for each assessment period according to the rules described in Section 32a of the Income Tax Tariff – Income Tax Act (EStG).
The basic tax-free allowance stated in the table below is adjusted annually and applies per capita. The basic tax-free allowance for couples is twice as high as for single people.
|Tax Year||Single||Couples *|
|2023||10.908 €||21.816 €|
|2022||10.347 €||20.694 €|
|2021||9.744 €||19.488 €|
|2020||9.408 €||18.816 €|
|2019||9.168 €||18.336 €|
The Children’s Tax-Free Allowance and Single Parents
In addition to the basic tax-free allowance (Grundfreibetrag), each child is taken into account either through child benefit (Kindergeld) or the children’s tax-free allowance (Kinderfreibetrag). In the current year, parents will initially receive child benefits (Kindergeld). When submitting a tax return, the tax office automatically carries out a favorable check. They determine whether the tax advantage resulting from the children’s tax-free allowance is higher than the child benefit paid out. If the tax advantage is lower, the child benefit remains. Single parents receive an additional relief amount of children’s tax-free allowance.
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