Church tax pray and save

Church members pay more taxes than others. We tell you how to reduce the additional charges.

  1. Overview

Pray and save

More than half in Germany subject to church taxes

Slightly more than half of the people in Germany are Catholic or Protestant. Financially, this means that you pay church tax on your income. Many members do not know they can reduce these taxes. For example, by applying for a cap on church taxes in some federal states or for a partial waiver after a severance payment from their former employer.

Who has to pay how much church tax is also determined by the church tax laws of the federal states. They are the same in many ways, but there are differences in some places. We show what applies where and how members can save.

Our advice

© Stiftung Warentest / Rene Reichelt

How church tax works

The state, not the churches, collects the church tax. In concrete terms, this means that the tax offices collect the tax from the members and forward the money to the religious communities. These pay the state for the collection through the tax office a compensation. In Bavaria, church tax offices take over the collection of church tax on income tax.*

Even though the number of people leaving the church has been high for decades, the churches’ income is increasing. In 2020, a total of more than 12 billion euros in church tax was paid to the Catholic and Protestant churches in Germany. The money is used for parish services and religious education, daycare centers and church buildings. For some of these areas there are also government subsidies.

In Germany, all religious and ideological communities that are recognized as public corporations are allowed to levy church tax. These include Jewish religious communities, free religious communities and the Old Catholic Church. Other communities such as the Orthodox churches and humanist associations, on the other hand, do not pay a church tax.

Many other believers do not pay church tax, such as Muslims, Methodists, Baptists and Buddhists.

Cheaper in Southern Germany

Depending on the federal state, believers pay different amounts of church tax. The tax rate in Baden-Wurttem-berg and Bavaria is 8 percent. In the other federal states it is 9 percent. This percentage is levied on wage tax, income tax and capital gains tax.

Employees have the tax deducted directly from their monthly paycheck by their employer. So you get less net wage. The employer applies the tax rate of the respective federal state in which the workplace is located. If an employee lives in a federal state with a different tax rate, the tax office later calculates the tax at the rate of the place of residence.

In the case of interest and dividend income, banks automatically collect the church tax – but only when the tax-free amount of 801 euros (married couples 1,602 euros) has been exhausted. Investors can object to the automatic deduction of church tax. To do this, you must apply to the Federal Central Tax Office for a blocking notice. Applications submitted by 30. The income taxes received on June 21 of a year are effective from the following year. The tax office collects the tax with the next tax assessment.

Settlement in the tax assessment

Even if you are self-employed or rent out real estate, you must pay church tax on your income. The tax office levies this with the tax assessment notice. In it it calculates the church tax on all income of the citizen. It deducts tax paid over the year on wages or capital gains. If this shows that citizens have paid too much, they receive a refund.

According to the church tax laws, religious communities may also charge tax on real estate. But only a few do this. Currently, for example, the Catholic dioceses of Speyer and Limburg and the Protestant churches in the Palatinate and the Rhineland. In this case, the local authorities levy the church tax together with the basic tax. It is assessed according to a fixed percentage rate. In the diocese of Speyer, for example, it is 10 percent of the property tax assessment amount, which in turn is a percentage of the value of the property.

Moving between federal states

If someone has moved between two federal states with different church tax rates during a year, the tax office proceeds as follows: It divides the total income tax to be paid for the year over twelve months and applies the respective church tax rate for each twelfth.

Tip: The lump-sum division into twelfths is unfavorable if you pay tax at around the 1. If you move from Hesse (9 percent) to Bavaria (8 percent) in July and earned less before the move. Because then you pay too much due to the lump-sum apportionment. In this case, you can apply to your local church tax office for a tax waiver.

Upper limit depending on federal state

The federal states deal very differently with limiting the tax to a maximum amount. Depending on local regulations, this cap is between 2.75 and 4 percent of taxable income. In some countries the percentage rate is exactly fixed. The capping takes place automatically with the tax return.

Other federal states leave it up to the religious communities whether and to what extent they limit the tax for their members. Here, taxpayers must apply for the cap at the church tax office. In Bavaria there is no upper limit at all.

*Corrected on 21.12.2021

Rules for church tax for couples

This is how the tax is divided among couples

If couples have chosen to file joint tax returns, the tax office calculates their church tax jointly. But what applies to spouses and partners, only one of whom is a member of a religious community that levies church tax?? The tax law speaks in this case of a faith-different marriage.

The problem: Income tax is calculated jointly according to the splitting rate. Church tax is only due on the income of the church member. The tax office therefore calculates a fictitious income tax for both partners according to the single rate. The ratio of the fictitious income taxes of both partners is transferred to the actual income tax of the couple. The church tax is finally calculated on the share of the church member.

Church fee or church tax

Instead of the church tax, a special church fee may be due for couples of different faiths. This is the case if the church member has no or significantly less income than the non-denominational partner. The church tax is graduated according to the joint taxable annual income and amounts to between 96 and 3,600 euros.

The tax office makes a comparison between church tax and the special church tax in the tax return. It sets thereby the amount, which turns out higher.

Special church tax

If one partner in a marriage or partnership is not liable to pay church tax, a special church fee is charged. It is based on the joint taxable annual income. The church tax is due if it is higher than the otherwise required church tax.

annual income (Euro)

Special church tax (Euro)

0 to 29 999

30 000 to 37 499

37 500 to 49 999

50 000 to 62 499

62 500 to 74 999

75 000 to 87 499

87 500 to 99 999

100 000 to 124 999

125 000 to 149 999

150 000 to 174 999

175 000 to 199 999

200 000 to 249 999

250 000 to 299 999

 from 300 000

This is how the tax office calculates the church fee

Example. Peter Schmitz is a member of the Catholic Church, his wife Carina is non-denominational. Peter has an annual income of 30,000 euros, his wife 60,000 euros. You have chosen joint taxation for your tax return. This results in a joint income tax of 20,222 euros.

For the church tax, the tax office now calculates a fictitious income tax for each of the two, as if they were assessed individually. For Peter this is 5,091 euros, for his wife 16,063 euros. Together, the couple would have a fictitious income tax of 21,154 euros.

The tax office now considers the share of the church member’s fictitious income tax in the joint fictitious income tax – in the case of the Schmitzs, Peter’s share. 5,091 euros out of 21,154 euros is 24 percent. The tax office transfers this percentage to the actual income tax of the two: 24 percent of 20,222 euros is 4,853 euros. The church tax is calculated on this amount. At a tax rate of 9 percent, this results in 436 euros.

Finally, the tax office still draws the special church fee for a comparison. With an annual income of 90,000 euros, it amounts to 696 euros. Since this is higher than the church tax, the special church tax is due in this case.

Dispute over special church tax

Again and again there are disputes about whether the comparative calculation between church tax and special church tax is correct. Critics say that the collection of the special church tax is only constitutional if the church member has no income of his own, i.e. he would not otherwise pay church tax. In current practice, however, the tax offices apply the comparative calculation. However, the religious communities can decide for themselves whether to levy a special church tax. The Catholic dioceses of Cologne and Trier, for example, waive the church tax.

If couples of different faiths have a joint account, the bank allocates half of the investment income to each partner. The church tax is then only deducted from the church member’s share.

Additional money for local churches

Some parishes levy a general church fee on all adult members with a minimum income in addition to the church tax. The money is used directly for local projects.

This is the practice in the diocese of Limburg and in the Protestant Church in the Rhineland and the Palatinate. In some congregations of the Protestant Church of the Palatinate, for example, the church tax is 24 euros per year. In other municipalities there is a staggered church fee, depending on the income of the member.

Save church tax

Less tax thanks to church tax

Church tax and church fees can be deducted as special expenses in the tax return. Employers take into account in the payroll for the whole year only 36 euros lump-sum amount. However, the church tax paid is usually higher. All contributions paid to the church in the calendar year are deductible. However, the tax office offsets the tax refund received in the same year from the previous year against your.

If a religious community such as the Orthodox Church does not levy church tax, its members can deduct voluntarily paid contributions as special expenses. This goes up to the height of the church tax rate usual in your federal state.

Partial waiver for severance payments

If you receive severance pay after losing your job, you can ask the church tax office for a partial tax waiver. Usually the church waives half of the church tax on such special payments. A legal claim to it does not exist however.

Church tax paid by the bank on capital gains can’t be claimed. The reason: The bank already takes church tax into account as a special expense when calculating the final withholding tax.

Objecting in the right place

If the tax office has calculated the church tax incorrectly, for example, after a person has left the church, there are two possible causes. In both cases, taxpayers can appeal against this:

Like this post? Please share to your friends:
Leave a Reply

;-) :| :x :twisted: :smile: :shock: :sad: :roll: :razz: :oops: :o :mrgreen: :lol: :idea: :grin: :evil: :cry: :cool: :arrow: :???: :?: :!: