German Church Tax is almost as controversial as the much-hated Rundfunkbeitrag public TV tax.
From the outside, most people would consider Germany to be a broadly non-religious, modern, secular state. However, the reality is that even though the number of active members of the church, especially amongst the younger generation, continues to decline, the church and state are very much intertwined.
How do I avoid paying German church tax and what are the consequences?
In Germany, both the Protestant and Catholic churches, as well as Jewish denominations, are legally empowered to collect taxes from their members. This is administered by the Finanzamt, which in turn takes a small administration fee from the moneys collected.
How is it collected?
If you are a regular, salaried employee, German Church Tax, or Kirchensteuer, is collected through the standard pay-as-you-earn income tax model. It will just show up as a separate line item on your monthly payslip.
For the self-employed, it’s just another tax which has to be factored in when you are building up a provision for your quarterly tax bill. If you employ the services of a tax accountant (Steuerberater), they will advise you how much to hold back.
Church Tax is not administered on businesses. Here there is a whole different slew of tax code which is applicable.