A maximum of €8004 annually can be exempt from tax if the person being supported earns less than €624 annually. If the person being supported earns more than €624 annually the tax exempt limit reduces by the amount this person earns. The money should not be used to pay for health or long term care insurance.
The person being supported should:
– Be outside Germany
– Be a relative to the applicant or to the applicant’s spouse
– Not be getting kindergeld through the person applying for the tax exemption nor from anyone else in Germany
– Not be getting a tax exemption according to §32 EStG (Kinderfreibetrag which ammounts to €1320 annually)
– Be entitled to support according to German law
– Not be divorced or separated spouse
– Be a spouse of applicant
– Not be able to work either due to age, disability, or taking care of kids younger than 6yrs
For grown up kids who receive Kindergeld plus the Kinderfreibetrag but have gone abroad for a further studies, the guardian/parent is allowed €924 annually a tax exempt amount. Each parent can only apply for half of these exemption limits.
For supportees who are old enough to work, the tax exemption doesn’t apply to them even if they are spouses to the applicant. It is assumed that if a supportee is able to work, they should support themselves. Unemployment isn’t a good enough reason for support.
The applicant for the tax exemption has to show evidence of supporting the person outside Germany. In special cases, e.g. in a civil war, the applicant may be allowed not to show evidence. Officials refusing to provide documents is not considered a reason not to provide evidence of support.
Applicant has to provide info on:
– Supportee’s name, location, address, occupation, marital status and number of children. This information should be certified by the officials in the country in which the supportee leaves
– When the applicant began supporting the supportee
– Information on how many people are supporting the supportee
Application forms can be found at: https://www.formulare-bfinv.de/
The applicant has to show evidence of having sent the money and the supportee receiving the money. In cases where the applicant visits their home country this can also be calculated, but there has to be sufficient evidence of support during the trip. In cases where the applicant uses a middleman to send the money, then a clear explanation has to be given and evidence that the supportee received the money has to be provided.
This is important to those living in Germany and have relatives, spouses or kids living outside Germany that they support. There are many other specifications and regulations. Please download the file from Bundesministerium der Finanzen titled “Berücksichtigung von Aufwendungen für den Unterhalt von Personen im Ausland als außergewöhnliche Belastung nach §33a Absatz 1 EStG” here: Tax Deductible Remittances to find out if you qualify and how to apply for the tax exemption.
Further Reading:
§33a EStG – http://www.gesetze-im-internet.de/estg/__33a.html
§32 EStG – http://www.gesetze-im-internet.de/estg/__32.html
