How to Get a Tax Refund in the EU
After 6 months of living in the European Union, a migrant becomes a tax resident. This means that now you have to pay a certain share of your income to the state every month. The money is spent on the needs of the area, e.g. improvement of schools and roads. Part of the money will go towards the employee’s pension fund.
Good news: part of the taxes can be returned as a tax refund. In this article, we will explain how to get a tax refund in the EU and what is required to do this.
Previously, we wrote about how to open a bank account in the EU.
What is a tax deduction
A tax deduction is an amount that reduces the taxable base: the amount of income based off which you must pay your taxes. This may be a refund of a portion of the previously paid personal income tax.
Refunds are available to any citizen who pays income tax (or for whom their employer pays it). Each EU country has its own rules. The exception is Monaco, where there is simply no income tax.
To receive a tax deduction in the EU, you need to submit an application and documents confirming the costs, to the responsible department. Let us look at the example of some European countries.
Tax deduction in Germany
In Germany, the amount of income tax depends on the amount of income. According to the German Federal Tax Office, the brackets are as follows:
|Annual Income (EUR)||Tax|
|Less than 9,984||0%|
|More than 277,826||45%|
Tax refunds in Germany can be used for different cost categories:
- work-related costs (software, equipment, tools, etc.),
- travel expenses,
- internet and phone,
- children’s needs,
- charity, etc.
Of course, the expenses must be documented, for example, to prove that you need a new laptop for work. Be prepared for the fact that reimbursement may be denied if the cost justification is not convincing enough.
In order to receive a personal income tax refund in Germany (Einkommensteuer), you must contact the tax office (Finanzamt). You have several years to apply — to receive a refund for 2022, contact the office by December 31, 2026.
Proof of expenses will be required. As a rule, you can get it from relevant service providers, i.e. treatment costs can be confirmed at the hospital. You will receive a document that shows expenses for the period along with the tax information of the company.
A refund can be claimed if the income tax has in fact been paid. That is, if you paid 0% taxes, there is simply nothing to receive a return from.
Tax deduction in France
Income tax in France must be paid on all your income, regardless of the nationality of the payer. The amount is calculated based on the funds received by the taxable household consisting of the taxpayer, their spouse and children.
|Annual Income (EUR)||Tax|
|Less than 10,084||0%|
|More than 158,122||45%|
The assessment depends on various factors, which allows you to tailor your tax liability to your personal circumstances. In addition to the deductions, there are a number of tax benefits, such as tax reduction for hiring domestic workers or for child care expenses.
Please note: In France, the taxable base is calculated for the whole family. The following rates apply:
- adult — 1,
- child — 0.5,
- single parent — 2.
You can find the detailed examples of tax calculations using the rates on the official government portal at service-public.fr.
Tax deduction in France can be claimed for:
- professional expenses (professional training, home to work travel, office equipment, etc.),
- support and education of children,
- purchase of real estate,
- home security costs,
- charity, etc.
The deadlines to submit the personal income tax return in France (impôt sur le revenu) are set annually by the French administration. As a rule, this is May or June of the year following the reporting year. To submit your documents, you need to provide two copies of the completed return along with your passport, property agreement and bank account number (RIB), to the tax office at your place of residence.
Tax deduction in Italy
To become a tax resident of Italy and be able to receive tax deductions (rimborso fiscale), after 183 days of your stay in the country, you need to get registered in the Italian Registry of permanent residents (Anagrafe). The tax brackets are as follows:
|Annual Income (EUR)||Income Tax|
|Less than 15,000||23%|
|More than 50,000||43%|
The tax year in Italy runs from January 1 to December 31, and personal income tax is paid in advance. The employer deducts taxes and social security contributions from the employee’s salary on a monthly basis and remits them to the relevant authorities. To claim any deductions, you must file a Modello 730 or Modello Reditti tax application form. The deadline for submission is September 30th of the following year.
There are many categories of expenses for which you can receive a personal income tax refund in Italy (imposta sul reddito delle persone fisiche):
- social benefits,
- charity and donations,
- mortgage or rent,
- child support expenses,
- veterinary expenses, etc.
If you work for an Italian employer, you can get some money back using your payroll. Medical expenses are best confirmed by filling in a tessera sanitaria document at the place of payment (for example, in a hospital or pharmacy) — this way they will show up on the tax office website.
Please note: Starting from 2020, you can only claim a deduction for expenses paid by a bank transfer or debit/credit card.
Use KoronaPay to get a tax deduction
One of the categories of expenses for which you can get a tax deduction in the European Union is money transfers to dependent relatives abroad. Moreover, this works not only for transfers to children and parents, but also to grandmothers, nephews and other relatives.
The complexity of making a deduction depends on the rules adopted in a particular country. In addition, not all EU states allow this. But where it is possible, you will need to do at least two things:
1. Provide evidence that the person to whom the money is being transferred is really a dependent and that the money is being sent to them (for example, to a bank card opened in their name). You will also need documentary proof that this person is indeed your relative.
2. Provide receipts for the transfers.
The Korona Pay service, which has a European license for making money transfers, provides receipts that are accepted by the responsible tax authorities.
To do this, specify your email when you register in the system, and after each transfer you send, a receipt with full details of the transfer will be emailed to you.
You can download the KoronaPay app from the App Store and Google Play. It is free. You can ask any questions about money transfers and documents required or received, in the technical support chat inside the app.
Print or save receipts at the end of the fiscal year and file them along with other documents before the due date. Tax returns are usually processed within a month, and after that, the approved amounts of extra taxes paid are returned to the resident.