Many EU and Non-EU students studying in Germany are still ignorant on the various taxes they are entitled to and can benefit from during their studies.
Some students have lost tens and hundreds of euros due to their ignorance on the tax system. Perhaps you are aware of how the tax returns operates but did you know you can save tax or claim study incurred costs from the tax office? Our Online Editor, Sidonie Mankah was able to get more information on tax advantages for students studying in Germany from our interviewee, Tim Werner, a final semester master’s student studying Physics at Ulm University.
V: Who is/are the brain(s) behind the Tax Studies website?
Tim: I conceived the idea of having a website to enlighten students in Germany especially international students on how to benefit from the different tax packages. Though I created the Tax Studies website known in German as ‘steuerstudies’, it is managed by a group of students. We use our free time and work together to explain taxes to students in an understandable manner.
V: What inspired you to create a tax studies website for students and in a few words, what is the tax studies page all about?
Tim: The idea of creating a website to facilitate students’ understanding of taxes had been in my mind for two years. However, I was not sure if there was a similar website. After research, I found nothing related to tax studies and that was how I started creating the website. I have noticed that it is not only foreign students who struggle with tax issues, but a lot of people are not aware about the importance of taxes and how they can claim income-related expenses as students as well as reduce their taxes. That was how I decided to summarize the knowledge I gained during my studies and put it somewhere such that people can benefit from it.
The main goal of our website is to provide a platform where students can either learn or understand better how the tax system operates in Germany. For instance, we explain what qualifies a student to apply for a tax return and with different examples, we illustrate the ways in which different categories of students can fill their tax return forms. From our website, students can easily understand how to save and claim taxes as well as reduce taxes.
V: You mentioned on the website that students benefit from many tax advantages, what are some of them?
Tim: For students to benefit from tax advantages, it is important for them to know how the tax system works. Tax return is one of such tax advantages that students can benefit from. Usually, the tax office looks at the income of students per year as well as their expenses in the same year. The cost is then deducted from their income and based on the new amount; the tax office calculates the taxes to be paid. Therefore, the higher the costs, the lower the taxes students need to pay. There is a specific amount (9000 euros) that students must not exceed if they want to be exempted from paying taxes and most students are below that threshold.
Also, all costs related to studies can be used in applying for tax return.
V: There are so many interesting concepts on your website one of them being a ‘loss carryforward’, a tool that enable students save taxes. How does this work?
Tim: German authorities know students do not have a lot of income, but they still want to enable students use the expenses during their studies later. Semester fees, writing materials, semester tickets are study materials considered study related costs which students pay from their own pockets. Students simply need to write down all these expenses and claim their expenditures later when they have an income. I would say the ‘loss carryforward’ is a ‘positive debt’ that students can claim upon getting their first salary once employed after the completion of studies. During a graduate’s first year of employment, he/she can claim the expenses incurred during studies. What happens is the Tax office will simply offset the income with the yearly expenses and note the study incurred expenses as loss carryforward where students can claim it later.
V: Advertising expenses is one of the ways in which students can reduce tax burden. What does advertising expenses mean and how can students benefit from it?
Tim: The term “advertising expenses” is misleading but is the literal translation from German which is about expenses related to income. For students at the Master’s level, I would recommend they fill out and hand in the tax form to the tax office so that they can benefit from income related expenditures. Commuting fee, purchased study materials, transportation and tuition fees are some of the income related costs that students can declare when applying for tax returns. The logic behind this is that the higher your academic qualifications, the higher your chances of securing a better paid job. There, these costs are like an investment in oneself to earn a better income later. These costs can be used to reduce taxes and students must live and be enrolled in a University in Germany to be qualified for tax reduction.
V: How do you ensure the accessibility and visibility of your website to more students? What are some of the challenges you face?
Tim: Right now, it is very difficult due to the health crisis, but we manage to give interviews, write guests articles on students’ blogs, and do podcasts mostly in German trying to reach as many people as possible. That is why the website is free and can be easily accessible to and by all. Despite the free accessibility of the website and its relevance, we still face difficulties in reaching many people and getting them informed probably because it is not the most interesting topic for most people. Sadly, much money is wasted due to their lack of awareness but hopefully, through this article, more students will visit our website to learn and gain more exposure on tax issues.
Currently, the information on the website is only in German but students can translate the page to English once they are on the website. Students can reach us through the contact form on our website for clarifications and comments.
For more information, please visit the Tax Studies website at: https://steuerstudies.de/
Sidonie Mankah Timah conducted the interview.
