German Inheritance Tax - FAQ

German Inheritance Tax - FAQ

Does Germany have an Inheritance Tax?

Germany has an inheritance tax (Erbschaftsteuer), which taxes the value of the acquisition of an individual.

When does Germany Tax the Worldwide Estate?

Germany taxes the worldwide estate, if either the beneficiary or the deceased is a German tax resident (Inländer) at the relevant time.

How does Inheritance Tax work in Germany?

Germany taxes each heir and beneficiary individually, not the estate itself. Tax rates and exemptions vary depending on the relationship to the decedent and the amount inherited. 

Is there a German Inheritance Tax on Assets in Germany if the beneficiaries and the decedent were foreigners?

If neither the decedent nor the beneficiary were German tax resident (Inländer), Germany taxes the German situs assets, e.g. real estate in Germany. 

What are the German Inheritance Tax Rules for Foreigners in Germany? 

With some exceptions (e.g. extended unlimited tax liability for German citizen) the taxation does not depend on the citizenship of the decedent or the beneficiary and foreigners are taxed under the same rules as German citizen. 

What are the Inheritance Tax Rates in Germany?

German inheritance tax rates range from 7 % to 50 %, depending on your relationship to the decedent and the value of your share in the net inheritance. 

What are the Inheritance Tax Thresholds in Germany for 2019?

German inheritance tax thresholds range from EUR 20,000 to EUR 500,000, depending on the relationship between the decedent and the beneficiary and the value of the net inheritance. 

What is the inheritance tax threshold for a Child of the Decedent?

A child of the decedent inherits EUR 400,000 tax free. 

Are spouses subject to German inheritance tax?

Yes. spouses are subject to German inheritance tax. There is no marital deduction. The tax-free exemption is EUR 500,000. The value of the claim for equalization of accrued gains (Zugewinnausgleich) is tax exempt. 

Who pays the German Inheritance Tax?

The beneficiary must pay the German inheritance tax on all transfers received. 

Who must file the German Inheritance Tax Return?

Whomever the inheritance tax office asks to file an inheritance tax return (Erbschaftsteuererklärung) must file an inheritance tax return. Generally, the inheritance tax office asks the beneficary or, if there is an executor (Testamentsvollstrecker), the executor to file the inheritance tax return. 

When is the German Inheritance Tax Due?

he tax becomes due upon receipt of the tax assessment (Erbschaftsteuerbescheid) by the person who has filed the tax return (e.g. executor or beneficiary). Generally, the assessed tax is due within one month after receipt of the tax assessment. 

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