Definition: Income Tax Certificate
Employees have the right to receive an Income Tax Certificate from their employer. This document provides information about the actual income tax deducted. Simultaneously, employers are required to submit an electronic Income Tax Certificate to the tax office once a year. This serves as evidence that the employer is fulfilling their tax obligations correctly.
What Is the Difference Between Income Tax and Personal Income Tax?
The employer deducts income tax and remits it to the tax office. However, it is the employee who is responsible for paying it, and the amount is determined by their tax class. This applies to all those who are in an employee-employer relationship.
Personal income tax, on the other hand, applies to individuals who are not employed. They are required to pay income tax on their earnings, with the specific amount determined by the tax rate.
Content of the Income Tax Certificate
Until 2013, information about income tax deductions was communicated through dedicated paper cards. This process is now entirely digitized, with information stored in a central database at the tax authorities.
The certificate mainly contains electronic income tax deduction characteristics, also known as ELStAM. These include, for example:
- Date of birth
- Tax identification number
- Tax class
- Information about church tax
- Child allowances
If an employee does not yet have a tax ID, their data can be assigned using the electronic transfer identification number, also known as eTIN. With this number, the tax office identifies the specific employee.
The certificate is useful, for example, for tax returns. For civil servants, it also includes information about retirement benefits. These benefits are received by retired civil servants instead of the statutory pension. They are tax and social insurance-free up to the amount of the pension exemption.
Issuing the Certificate
Employers must submit the electronic Income Tax Certificate to the tax office by the last day of February of the following year. Employees typically receive their printed certificate along with their payroll statement for the month of February.
If an employment relationship ends in the middle of the year, employees receive the certificate shortly after the end of the contract. Recipients of unemployment benefits are also entitled to an Income Tax Certificate from the employment office.
Employers are required to retain the Income Tax Certificate for at least ten years. There is no specific retention period for employees. However, the certificate serves various purposes. For example, it helps with the accurate calculation of pensions. It is also necessary for applications for parental benefits or student financial support for a child. Therefore, it is advisable to keep the Income Tax Certificates until retirement.
Lost Income Tax Certificate? Here's What You Can Do.
If you have lost your Income Tax Certificate, you should first contact your company's human resources department and request a copy of the certificate. The HR department should be able to provide you with a copy or send it directly to the tax office. If you are unable to contact the HR department or the certificate is no longer available, you can request a replacement certificate from the tax office.
To request a replacement Income Tax Certificate, you will need to use a form called "Antrag auf Ausstellung einer Bescheinigung für den Lohnsteuerabzug" (Application for Issuing a Certificate for Income Tax Deduction). This form can be downloaded as a PDF from the internet.
In your request, you will need to provide your full name, address, tax identification number, and the period for which you need the Income Tax Certificate. It's important to act quickly, as the Income Tax Certificate is needed for submitting your tax return.
Incorrect Income Tax Certificate
Dealing with an incorrect Income Tax Certificate is different. Employers are not authorized to correct errors themselves. If an employee contacts their employer regarding an error on the certificate, the employer contacts the tax office to make the necessary corrections. Since the certificate is not legally binding, a corrected version is not always necessary.