Learn About the Tax Benefit Test (Günstigerprüfung)

Over the years, the German government has been taking more cash from its citizens than it budgets for. This provides lots of money to invest where millions of such funds are needed the most.

However, what about you as an ordinary taxpayer? Do we not pay too many taxes that we do not know about? To determine if we are being overtaxed, several things may come into play. One of such is the favourable test (Günstigerprüfung). Here is what it is and how it works.

The Tax Office Conducts the Favourable Examination (Günstigerprüfung)

Just as the name suggests, the Tax Office is best placed to check whether there are possible tax benefits that you may realise as a citizen. Unfortunately, a good number of Germans do not know that they can get significant savings if they are approved for relief after the examination. The organisation performs the Favourable (Günstigerprüfung) test for anyone who wishes to check if there text benefits that he or she qualifies to get.

The Favourable test is offered in the following cases:

  • Investment income
  • Transport costs
  • Riester Pension
  • Child allowance or benefit

Child Benefits (Kindergeld) and Child Allowance (Kinderfreibetrag)

Parents are eligible to receive child benefits for their offspring or even the child allowance benefits. However, for you to be considered for the child benefit, you must apply for the tax relief. The tax office will then ask you to furnish it with your financial information along with the general financial standing of the family in general. Any parent is free to apply for this relief as it is based on the children and not so much on family status as a whole family.

After the tax relief application has been granted, the tax office takes steps to ensure that the benefits are offered and guaranteed to the recipients. This benefit is offered at the Family Fund section of the taxes. There is only one criterion used for determining the parent who deserves the relief is the test that they carry out. If you do not get the maximum amount, you can get smaller reliefs, depending on your circumstances.

What is the Special Deduction (Sonderausgabenabzug) or the State Allowance (staatliche Zulage) for the Riester Pension?

The tax regulation allows up to 1,900 euros for each calendar. These are regarded as special deductions. The amounts may be made of state allowances or self-paid contributions. Again, you have to go through a test to determine if you are eligible for the offers. This relief is open to anyone that meets the qualification below and has any self-paid contributions.

There are no deductions that are approved if the tax savings are found to be lower than the allowance (Freibetrag). Therefore, you should check if your tax savings are higher than allowance before making an application.

Travelling Allowance (Entfernungspauschale)

If you are not a freelancer who works at home, you will have to take care of transport costs each day. These costs vary from one individual to another, but every worker takes in the transport costs.

These costs are divided into three different categories as highlighted next:

  • Transport from home to work and back
  • Transport to other locations on behalf of the company
  • Trips to the family home for commuters

There are allowances for miles covered if you have adequate proof of transport.

The allowance is offered as follows:

  • You get 30 cents for a car per every kilometre you drive.
  • If you are using a scooter or a motorcycle, you get 20 cents per every kilometre driven.

There are no restrictions with the car used or location driven as long as it fits any of the three categories discussed above. You must provide adequate proof to back up your application so that you increase your chances of approval.

However, if the actual transport costs are higher than the distance charge, the tax office determines the lower amount by doing a favourable inspection (Günstigerprüfung).

Tax Capital Gains (Kapitalerträge)

Some of the taxpayers enjoy an individual tax rate that is less than 25 per cent. In this case, the percentage paid is usually lower than the withholding tax (Abgeltungsteuer). You must apply for the relief assessment (Günstigerprüfung) with the Tax Office so that your request may be taken into consideration. Any overpaid taxes that may become apparent will be refunded.

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