Submitting a Tax Return Late: The Rules That Apply

If you wish to submit a tax return late, the key question is: do you want to file the return voluntarily for a prior year? Or is the tax office compelling you to file and you have simply missed the applicable deadline? In the second case, sanctions such as a late-filing surcharge and an enforcement penalty are at risk. You have no other option: submit the tax return, or any individual documents, as quickly as possible.

Some taxpayers are not required to submit a tax return at all — this applies in particular to employees. The state collects wage tax directly from the employer, so from the tax office's perspective no tax return is necessary. Have you never submitted a tax return?

In that case, consider the following points:

1. Confirm that you are still not subject to a filing obligation. This can change under certain circumstances. For example, if you receive short-time working allowance (Kurzarbeitergeld) for the first time, you will be required to complete a tax return.

2. Calculate whether a voluntary tax return is worthwhile for you. For many taxpayers it is, as they can benefit from, among other things, the commuting allowance and deduct costs such as tradesmen's invoices.

If you are permitted to file voluntarily, a generous deadline applies: you have four years to submit the return retrospectively. For example, the deadline for the 2020 tax year does not expire until 31 December 2024.

Many taxpayers are required to submit a tax return by the relevant deadline. This applies, for example, to all business owners, regardless of their legal form. As a freelancer or trader you must submit a tax return so that the tax office can calculate the precise amount of tax due. Some employees are also subject to the filing obligation — this includes employees who received wage-replacement benefits or had more than one source of employment income during the tax year.

Where a filing obligation exists, you must send the tax office your income tax return by the end of July of the following year. In the wake of the COVID-19 pandemic, temporarily more generous rules applied, shifting the deadline by several months. If you have your tax return completed by a tax adviser, the deadline is extended by seven months.

If you miss your filing deadline, swift action is advisable. Ideally, submit your tax return before the tax office contacts you. Every day counts.

In exceptional cases, the tax office will permit a later filing of the tax return. A deferral requires a well-reasoned application — approval lies at the discretion of the responsible officials. There is no entitlement to an extension of the deadline.

Typical grounds for a deadline extension are:

• A serious and prolonged illness
• Absence of relevant documents
• A prolonged stay abroad
• Relocation

If you have missed the filing deadline, you should act quickly to submit your late return. The tax office takes a firm line when mandatory tax returns are not forthcoming. The following consequences may arise:

• Late-filing surcharge: This amounts to 0.25% of the assessed annual tax liability for each month (or part thereof) of delay. The minimum is 25 euros per month. If you submit the tax return within 14 months of the end of the tax year, imposing the surcharge is at the tax office's discretion. Regardless of the period, the tax office may waive the surcharge if the tax assessed is zero or if a refund is due.

• Late-payment interest: From the 15th month after the end of the tax year, the tax office charges interest on the outstanding tax liability.

• Coercive measures: If taxpayers continue to fail to file a tax return despite being prompted to do so, the tax authority will resort to coercive measures such as an enforcement penalty. These measures are intended to pressure those affected into fulfilling their duty to co-operate. Once the tax return is submitted, the grounds for the enforcement penalty and other coercive measures fall away.

For some years now, the tax office has only reviewed supporting documents on a sample basis — you do not need to send them in together with your tax return. This reduces your administrative burden and has the added advantage that tax authorities rarely request documents to be submitted retrospectively.

There are, however, exceptions: If you are, for example, claiming a home office for tax purposes for the first time, the tax office will require a completed form and supporting documents. It will set you a separate deadline for this. Meet that deadline — failing to do so carries the same risk of coercive measures as not filing the tax return at all. The same applies if tax officials wish to check your documents on a sample basis. Send the requested documents in on time.

With the support of experienced tax advisers, you avoid the problem of late submissions altogether. Your tax adviser ensures that all tax returns reach the tax office on time. A further advantage is the extended filing deadline available when you engage a tax adviser. This is particularly valuable for business owners, as it gives them time to complete their bookkeeping and resolve any uncertainties if needed.

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