Taxes in Germany for Ukrainians

This page helps you understand which taxes in Germany apply to you: as an employee, as a self-employed person, or as someone with income or property in Ukraine. The figures are for the 2025 and 2026 tax years, with a reference to the legal provision. A separate page explains how to file a tax return; the link is at the end.

# Who pays income tax in Germany?

Tax on all worldwide income is paid by anyone who has a residence (Wohnsitz) or a habitual abode in Germany. The law treats as a residence a home that a person has in circumstances showing that they will keep it and use it. A habitual abode always exists when a person stays in Germany continuously for more than six months, and the tax liability then applies from the first day; short trips abroad do not interrupt this period. The law makes an exception only for a purely private stay, for example visiting someone or on vacation, if it lasts no longer than a year.

Your immigration status does not decide this. The Federal Central Tax Office (BZSt) says that the tax identification number (Steuer-ID) is assigned only under tax rules, and that refugees who were first housed in reception centers, sports halls or containers are also taxed on all their income.

Anyone who does not live in Germany but has income here, for example from renting out an apartment, pays tax only on German income. As a rule, such people have no tax-free allowance; for wages it is kept only up to the amount of the wages themselves, and tax on them is withheld under class I. On application, they can be taxed as residents if at least 90% of their income is taxed in Germany or the rest does not exceed the tax-free allowance. For people who live in Ukraine, this allowance is cut to a quarter: for 2025 it is €3,024. The application requires a certificate from the tax authority of the country of residence.

# How much is the tax?

The rate rises with income. For married couples who file a joint return, tax is calculated with the splitting method (Splitting): on half of the joint income, and the result is doubled.

The thresholds in the table refer to the annual taxable income of one person.

The solidarity surcharge (Solidaritätszuschlag) is 5.5% of the tax, but it is not paid as long as the tax itself for the year does not exceed €19,950 in 2025 (€39,900 for married couples) and €20,350 in 2026 (€40,700 for married couples). Church tax is paid only by members of churches that levy it: 8% of the tax in Bavaria and Baden-Württemberg, 9% in the other states (according to the Hamburg city service).

Useful deductions for employees:

• €1,230 a year is deducted from an employee’s income without any receipts (§ 9a EStG);
• for the commute to work, from 2026 you deduct €0.38 for each full kilometer of distance between home and workplace for each working day, starting from the first kilometer; no more than €4,500 a year in total, but this limit does not apply if you drive your own car or a car provided to you (§ 9 EStG).

# What are tax classes?

Your tax class (Steuerklasse) determines how much tax your employer withholds each month; the final tax is calculated from your tax return.

• I: single people, and also non-residents.
• II: a parent raising a child alone.
• III and V: married couples on a joint application, if both are tax residents of Germany and do not live apart.
• IV: married couples by default.
• VI: a second job and any further jobs.

If your husband or wife lives in Ukraine, you are not entitled to classes III and V: both of you must be tax residents of Germany.

# What about income and property in Ukraine?

The agreement for the avoidance of double taxation of 3 July 1995 applies between Germany and Ukraine; it has been applied since 1 January 1997, and it also applies for 2025 and 2026. Below are the rules according to its official Ukrainian text. If the Ukrainian, German and English versions differ, the English version prevails.

Income exempt under the agreement still raises the rate on your German income (Progressionsvorbehalt). For rental income from real estate, the law makes an exception only for housing in the EU and the European Economic Area, so it does not extend to housing in Ukraine. In the tax return, such income goes in the Anlage AUS annex, and foreign wages in the Anlage N and Anlage N-AUS annexes.

We did not find an official explanation of how Germany taxes a resident’s Ukrainian pension. More on pensions on the page Pension in Germany for Ukrainians.

Interest and dividends from a Ukrainian bank on which no tax was withheld in Germany must be declared by you in the tax return (the Anlage KAP annex). The rate on capital income is 25%; €1,000 a year per person of this income is tax-free (€2,000 for married couples), and foreign tax can be credited only up to 25%. If such income comes from a country outside the EU and the European Free Trade Association, and the tax office does not receive data on it automatically, the period in which the tax office can assess the tax starts no earlier than the end of the year in which it learned of the income, and no later than ten years after the year for which the tax arose.

If you support relatives in Ukraine, for 2025 the maximum deduction for these costs is cut to €3,024 a year: Ukraine belongs to the fourth country group, for which such amounts are reduced.

More examples are in the articles Ukrainian income in a German tax return (in Ukrainian), Renting out an apartment in Ukraine while living in Germany and A deposit in Ukraine if you live in Germany (in Ukrainian).

# What if you are a sole trader (FOP) in Ukraine?

If you live in Germany and have no fixed place of business in Ukraine, then, in our reading of the 1995 agreement, the profit or fees of a FOP are taxed only by Germany. We did not find an official explanation from the German tax authorities specifically about FOPs, so you need individual advice. German law allows the single tax paid in Ukraine at most to be deducted from income, not credited against the tax, so double taxation is possible. We have not established whether the single tax counts as a tax covered by the agreement.

More details in the article Sole trader (FOP) and moving to Germany (in Ukrainian).

# What will the new agreement with Ukraine change?

Germany and Ukraine signed a new agreement for the avoidance of double taxation in Paris on 19 May 2026. It is not yet in force. The government is asking the Bundesrat to complete its consideration on 20 November 2026, and the agreement will start to apply from 1 January 2027 only if the two countries exchange instruments of ratification by the end of 2026. Until then, the 1995 rules apply.

The main changes under the text of the new agreement:

• pensions from statutory social insurance will be taxed only by the country that pays them;
• the 183 days for wages will be counted over any 12 months, not over a calendar year;
• Ukraine will be able to withhold no more than 5% on interest, and 5% or 15% on dividends.

# What does a self-employed person pay?

First you need to determine the type of activity. The law lists the liberal professions (Freiberufler): scientific, artistic, literary and teaching work, doctors, engineers, architects, journalists, translators and similar professions. Separate rules on registration and tax apply to a trade (Gewerbe).

• Registration. A trade is reported to the local authority (Gewerbeanzeige) at the same time as the activity starts, and the authority passes the data on to the tax office (Finanzamt). A liberal profession reports directly to the tax office. The notification to the tax office and the questionnaire for it must be submitted within a month.
• Questionnaire for the tax office. The questionnaire on starting an activity (Fragebogen zur steuerlichen Erfassung) is submitted only electronically via ELSTER; there have been no paper forms since 2021. Registration with ELSTER can take up to two weeks; without a Steuer-ID you can create a simplified account with your email address, only for this questionnaire.
• Value added tax. The standard rate is 19% and the reduced rate 7%; from 2026 the 7% rate also applies to food in restaurants. A small business (Kleinunternehmer) does not charge this tax if turnover in the previous year did not exceed €25,000 and turnover in the current year will not exceed €100,000. A small business does not file returns for this tax unless the tax office specifically requires them. Anyone who has waived this exemption must stick to that choice for at least five years.
• Trade tax (Gewerbesteuer). For individuals, trade profit is reduced by €24,500, and part of this tax is credited against income tax.
• Tax return. Anyone with income from business or self-employment files the tax return only electronically.

# What mistakes should you avoid?

• Assuming that temporary protection exempts you from taxes or, the other way round, makes you a tax resident by itself.
• Not declaring interest from a Ukrainian bank.
• Relying on the new agreement with Ukraine for 2025 and 2026: the 1995 agreement applies.
• Applying for classes III and V when your husband or wife lives in Ukraine.