Does Germany have an Inheritance Tax?
Yes, Germany levies inheritance tax (Erbschaftsteuer) based on the German Inheritance and Gift Tax Act (Erbschafts- und Schenkungssteuergesetz, ErbStG)
How does German Inheritance Tax work?
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.
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.
Does Germany have Double Taxation Agreements covering Inheritance and Estate Taxes?
Germany has tax treaties with the USA (Germany-U.S. Estate and Gift Tax Treaty), Greece, France, Sweden, Denmark, and Switzerland, that may override German domestic law.
May Germany tax an Inheritance if there is a Double Taxation Agreement?
With some exceptions, the Treaties allow Germany to tax the inheritance if the beneficiary or the decedent has a fiscal domicile in Germany and, under Treaty law, double taxation is avoided by offsetting the foreign tax against the German tax or vice versa.
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 was a German tax resident, Germany taxes the German domestic property (Inlandsvermögen), 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 citizens), the taxation does not depend on the citizenship of the decedent or the beneficiary, and foreigners are taxed under the same rules as German citizens.
What are the Inheritance Tax Rates in Germany?
German inheritance tax rates range from 7 % to 50 %, depending on the relationship to the decedent and the value of your share in the net inheritance. Further information is available here.
What are the Inheritance Tax Thresholds in Germany for 2025?
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. Further information is available here.
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. The transfer on death to a spouse of the deceased is generally not excluded from taxation. However, certain benefits are available. See below.
What is the Inheritance Tax Threshold for the surviving Spouse?
The family home (Familienheim) is tax-exempt if the spouse continues to live in it for at least 10 years or has to move out for compelling reasons. The inheritance tax threshold for the surviving spouse is EUR 500,000. Furthermore, if the spouses were married under the German default property regime of community of accrued gains (Zugewinngemeinschaft), the value of the claim for equalization of accrued gains (Zugewinnausgleich) is tax exempt. Finally, an additional tax-free exemption of up to EUR 256,000 is granted to the spouse if he/she is not entitled to inheritance-tax-free pension payments upon the death of the first dying spouse.
Do Gifts decrease the available Inheritance Tax Threshold?
A gift and an inheritance from the same person within 10 years are aggregated, and the tax is (re-) calculated based on the aggregated taxable acquisition. Thus, if the decedent made a gift before his death to a future beneficiary under his Will and dies no later than 10 years thereafter, the full inheritance tax threshold may not be available.
Are transfers to Trusts subject to German Inheritance Tax?
Germany taxes the transfer to an opaque trust (intransparenter Trust).
Can a foreign death tax be offset against the German inheritance tax?
If the decedent was not a German tax resident (Inländer), a foreign inheritance or estate tax on all assets which are not considered German domestic property (Inlandsvermögen) can (with some exceptions) be offset against the German inheritance tax. However, if the decedent was a German tax-resident (Inländer), only the foreign death tax (inheritance tax or estate tax) on property and some other tangible property (but not financial assets with a foreign bank!) can be offset against the German inheritance tax.
Who pays the German Inheritance Tax?
The beneficiary must pay the German inheritance tax on all transfers received. If there is an executor (Testamentsvollstrecker), the executor will generally pay the tax out of the share of the beneficiary.
Is there a Duty to disclose the Inheritance?
According to § 30 ErbStG, the beneficiaries are obliged to report any taxable acquisition at death (Erwerb von Todes wegen) to the local inheritance tax office (Erbschaftsteuerfinanzamt) within 3 months of becoming aware of the taxable acquisition. For more information, please check the article German Inheritance Tax: Duty to report an Inheritance from Abroad.
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 beneficiary or, if there is an executor (Testamentsvollstrecker), the executor to file the inheritance tax return. The filing period is generally one month. Upon application, an extension of the filing period is granted in most cases. For further information on the German inheritance tax return and the tax assessment, please check our article German inheritance tax return: preparation, filing, and tax assessment.
When is the German Inheritance Tax Due?
The 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 Inheritance tax assessment notice (Erbschaftsteuerbescheid).
