German tax number – Everything at a glance

Tuesday, 2. February 2021 | 0 Comments

The tax number is needed for many applications and procedures in Germany. However, the tax number causes confusion and uncertainties. Many don’t know what’s behind it, where to find it or if they even have one. We explain everything about the tax number, where you can ask for it, and what needs to be paid attention to.

 

What is a tax number?

The tax number is given to every person or business in Germany in order to identify them. It usually has to be added to all important documents like the tax statement or invoices. In this way, the tax office can assign various processes to a specific person and avoid confusion. A tax number is indispensable, especially for the work of self-employed persons. It is needed to be able to issue an invoice, i.e. to receive the agreed remuneration at all.

What is the difference between tax number and tax identification number?

The tax number of a person can be changed throughout their life. This could happen for moving places, a wedding, or as part of a business start-up. Conversely, the tax identification number always stays the same. Every person in Germany has a tax identification number all their life. This number was introduced first in 2007 and is given to everybody right after they are born. However, a German residence is a prerequisite for the assignment. If, for example, this is suspended for a period abroad, the tax ID is “suspended”. As soon as the residence is taken back to Germany, the same number is assigned again and not a different one.
 
Even marriage or a change of the responsible tax office does not affect this. In this way, each person receives only one tax ID, which enables precise assignment by the authorities. The number consists of eleven digits and is, therefore, shorter than the tax number. The tax ID is then deleted when it is no longer needed – this is the case no later than twenty years after the death of the holder.
 

How can you apply for a tax number?

You can apply for the tax number online at your relevant tax office in just a few steps. Tradespeople do not normally have to actively request it – regardless of whether they are self-employed or freelancers: Following the registration of trade, the tax office automatically informs the owner of the tax number.

If you apply for the tax number online, the tax office sends the applicant a questionnaire by mail. In this “questionnaire for tax registration”, the expected turnover and profit must be stated. After sending in the completed questionnaire, it usually takes another two to six weeks for the tax office to send out the tax number. It is important that the questionnaire is completed in full and, above all, signed – if the signature is forgotten, this only delays the process unnecessarily.

How can I find out my tax number?

There are different ways to find out your tax number. The tax number can be found, among other things, at the top right of the income tax notice. In Germany, it consists of thirteen digits, the first four of which identify the Federal Tax Office. If the income tax assessment notice is not available, the number can also be obtained by calling the tax office. Finally, a tax return can also be prepared without specifying a tax number at all – in this case, the Federal Tax Office assigns a number to the author of the return when it is received.
 

Who needs a tax number?

Everyone who wants to prepare a tax return, an invoice or a similar document needs a tax number. Furthermore, every employer must know the tax numbers of his employees, as this is the only way he can pay the wage tax for his employee. The tax number is therefore located in the upper right corner of the wage tax card. An exception to this is jobs in which no more than 450 euros is earned: No tax is payable on this salary, which is why no tax number is required.

Self-employed persons, on the other hand, usually have to pay taxes and therefore need this number. Banks also often ask for the account holder’s tax number. This happens, for example, in cases where they have to provide information on compliance with the limits of exemption orders. Parents still need the tax number of themselves and their children in order to apply for child benefits. This is to prevent duplicate payments from occurring.

The tax number for tradespeople

Business start-ups should apply for a tax number before starting their business. This happens at the relevant Federal Tax Office. Self-employed persons, on the other hand, usually have to pay taxes and therefore need this number. Banks also often ask for the account holder’s tax number. This happens, for example, in cases where they have to provide information on compliance with the limits of exemption orders. Parents still need the tax number of themselves and their children in order to apply for child benefits. This is to prevent duplicate payments from occurring.

Especially with new business start-ups, many questions arise. False information can cause consequences in both directions. Therefore, it is worth it to conduct a tax consultant, to go through every step of the information and to verify.

Once a tax number is assigned, it must be indicated on all invoices issued. In the case of international activity within the EU, on the other hand, the trader also receives a VAT identification number, which is issued by the Federal Central Tax Office, provided it is applied for. In this way, a unique assignment is also made possible in other European countries, and processes are simplified. The VAT ID can be indicated on invoices as an alternative to the tax number.

Important notes for self-employed

The Federal Tax Office requires that private and business finances be separated. This facilitates a quick overview of all income, expenses, and sales and leads to fewer inquiries and a need for clarification for both sides. Banks also sooner or later refer holders of a free checking account for private use to use a business account for which a fee is payable. This means that, in the best-case scenario, start-ups should obtain a business account before they begin their activities. In this way, finances can be kept strictly separate right from the start, which ultimately also saves the self-employed person considerable work.
 

Tax registration of your self-employment

Apply for your tax number easily from home with GetMyInvoices and bring more flexibility to your self-employment: https://www.accountable.de/en/getmyinvoices-online-tax-registration/

 

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