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(2020)
extraordinary income included therein
extraordinary income included therein
Specify the extraordinary income according to sections 34 and 34 b Income Tax Act (EStG). This must be income which is not subject to German income tax.
Extraordinary income includes in particular:
- Remuneration for activities lasting several years
- Capital gains
- Compensations within the meaning of sect. 24 No. 1 Income Tax Act (EStG)
Extraordinary income must be taken into account when determining the tax rate, (so-called "German progression clause (Progressionsvorbehalt)"). This means that the income is included at the rate of one-fifth when determining your tax rate but not when determining your taxable income.
The conversion of income in foreign currency must be done on a monthly basis using the European Central Bank's euro reference rate. However, it is not objectionable if wage payments received in a foreign currency are converted on the basis of an annual conversion rate - determined from the monthly published VAT reference rates, rounded down to the nearest 50 cents. (Ministry of Finance (BMF) letter dated Dec. 14, 2014)
Here is an overview of the annual conversion rates for the key foreign currencies.
