SteuerGo FAQs

What are remunerations for several years' work?

An additional payment or advance payment for several years' work can be taxed at a reduced rate in the year of payment using the fifths method. The decisive factor is that the work must be carried out over a period of two calendar years.

With the so-called one fifth regulation, extraordinary income is favoured in German tax law (sect. 34 Income Tax Act (EStG)). This so-called "tax-privileged income" is income that was earned over several years, but realised and taxed in an individual year...