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(2023)
... extraordinary income included therein
... extraordinary income included therein as defined in sections 34, 34b of the Income Tax Act (EStG)
... extraordinary income included therein
... extraordinary income included therein as defined in sections 34, 34b of the Income Tax Act (EStG)
Specify the total extraordinary income that 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 § 24 No. 1 Income Tax Act (EStG)
If applying for unlimited tax liability or applying for the personal and family-related tax benefits, the amount of foreign income earned during the time abroad which was not subject to German income tax must be checked.
Extraordinary income must be taken into account when determining the tax rate, (so-called "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 Euro reference rate from the European Central Bank. 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 VAT reference rates published monthly, rounded down to the nearest 50 cents. (Ministry of Finance (BMF) letter dated 14.12.2014)
Here is an overview of the annual conversion rates for the key foreign currencies.
