There are many different ways to prepare tax returns in Germany. In addition to commercial software and tax apps, ELSTER offers a free alternative. In our article, you can find out what ELSTER is and what features the platform offers. We also explain the different ways to register and provide a quick guide for preparing tax returns with ELSTER in Germany.
What's in this article?
- What is ELSTER?
- How to register with ELSTER
- How does registration with a certificate file work?
- What features does ELSTER have?
- Filing a tax return in Germany with ELSTER
What is ELSTER?
ELSTER is a joint project between the German tax administrations of all federal states and the federal government for the digital processing of tax returns and registrations. The ELSTER portal is a type of online tax office for private individuals, employers and businesses in Germany, as well as associations and tax consultants. Users can create their tax data through ELSTER quickly, securely and – above all – free of charge, and submit it to the German tax authorities. Even if someone does not prepare their tax return with ELSTER, but instead uses another type of software or app, they are indirectly involved with ELSTER. This is because all tax programmes in Germany send their users' entries to ELSTER. From there, they are then forwarded to the relevant German tax office. ELSTER has been in operation since 1996 and is still coordinated by the Bavarian State Tax Office. The name is an abbreviation of the German term "elektronische Steuererklärung", meaning "electronic tax return".
What is "My ELSTER"?
"My ELSTER" is the personal user area on the ELSTER platform. Up until the 2019 tax return, the "ELSTER form" software was also available. This could be installed on home computers and used to prepare tax returns. However, this is no longer possible. Since the 2020 tax year, the web-based application "My ELSTER", which works directly in web browsers, has been the only option available. One of the features that "My ELSTER" offers is the ability to access receipts that have already been received by the tax office. In addition, users can view what data has already been entered on the electronic income tax card.
How to register with ELSTER
Those wishing to use ELSTER must register and create a user account. There are three ways to register with ELSTER, which are available to all users free of charge:
- An ELSTER certificate file
- The ElsterSecure app
- An ID card
In addition, there are two paid registration types: the use of a security stick, which is particularly suitable for entrepreneurs, and the use of a signature card – which is of particular interest to tax consultants.
ELSTER itself recommends registration via a certificate, which we will discuss in more detail in the following section. If users opt for the app version, all they will need to register is a smartphone or tablet with a camera. The ElsterSecure app is then loaded. The app is available for download via the Google Play Store or the Apple App Store. In the app, users will then select the "ElsterSecure" option, found under "Create user account" and "How do you want to log in to My ELSTER?". They will then receive an activation ID by email and an activation code by post. The ID can then be entered in the app, while the QR code on the letter received in the post is scanned using the camera on the user's device. Once the user has registered successfully, ElsterSecure can be used to log in to "My ELSTER".
To register using an ID card, it must be possible to read the data reliably from the ID. One option is to use a modern identity card in credit card format for this. Another option is to use an appropriate ID card reader and AusweisApp2. A smartphone with a near-field communication (NFC) interface can also be used as an ID card reader. The app is available for download via the Google Play Store, Apple App Store and Windows. In order for users to register with an ID card, this function must be activated under "My user account" in their personal "My ELSTER" account. Here, they can set which registration method they want to use. If the user chooses the ID card method, they will receive an activation PIN, which they will need to change to one that they choose themselves. This activates the ID card and allows it to be read.
For businesses, ELSTER also recommends the use of a security stick for registering and subsequently logging in. This is a special USB stick that stores a user's digital identity via a cryptography chip. The stick costs a one-off fee of €56.48 (as of November 2023). To use it, the ElsterAuthenticator software needs to be installed. The software can be downloaded for Windows, macOS and Linux.
There are also costs for registration via signature card – usually between €50 and €150. This is because the signature card is not issued by ELSTER, but instead by German banks, specialist companies or certification authorities (known as trust centres). Personal identification is taken care of by them, so the ELSTER signature card only needs to be read. As a result, a card reader and the ElsterAuthenticator software must also be used for this version.
Learn more about the signature card – for example, about approved providers and cards.
How does registration with a certificate file work?
The majority of ELSTER users in Germany register with the aid of a certificate file, which is also colloquially referred to as the "ELSTER certificate". This is a file with a special .pfx format, in which the data is protected cryptographically. It can only be activated with a password and then linked to a user account in "My ELSTER". A certificate file can be stored on different media – such as hard drives or USB sticks – and copied as often as needed. Registration with a certificate file can be completed in four steps:
- Create account: To request a certificate file, the user must first create an account on ELSTER.
- Submit personal data: After selecting "Certification file" from the login options, users can enter their personal data – name, date of birth and tax identification number. They can then create a username, select a security question and submit the data to the tax authority via the platform.
- Receive activation data: After around 14 days, an email will arrive from the tax office with an activation ID, and an activation code will be delivered by post. Since the postal correspondence is sent automatically to the address held by the registration office, users should check that it is up to date.
- Download certificate file: With ELSTER, users enter the data that is transmitted by the tax office. If this is correct, they can download and save the certificate file. This allows them to log in to "My ELSTER" and assign their own password if they would like to. In the future, ELSTER authentication will be carried out with a combination of a certificate file and a password.
How can the ELSTER certificate be extended?
An ELSTER certificate is valid for three years. ELSTER will send several reminder emails before the validity period expires. If the certificate file has not yet expired, it can simply be extended in the user's personal ELSTER account. Under the note on the expiry of the validity, there is a "Renew certificate now" button. If the user clicks on it, a new file will be created that they can save and activate with their password.
If the ELSTER certificate has already expired, they will need to apply for a new one. To do this, they'll need to use the "Certificate file lost or certificate expired?" option when logging in. Alternatively, they can also visit this page if the certificate file has expired or they have forgotten the password.
What features does ELSTER have?
ELSTER is best known as a platform for completing online tax returns in Germany. These can be created using ELSTER and submitted to the tax authority. The income tax return is just one of many possible options – inheritance and gift tax returns, together with property tax returns, are also available. For example, businesses can prepare their sales and income tax returns with ELSTER. The corresponding pre-registrations can be made via the platform. For wage and value-added tax (VAT) returns, the data must be submitted via ELSTER – this is mandatory. Anyone who is self-employed or runs a business is generally obliged to submit advance returns and income tax certificates to the tax authority electronically. However, employees, senior citizens and pensioners may also use paper forms.
As ELSTER continues to expand, there are now several other types of taxes, declarations, registrations, applications and notices available on it, too. Find an overview of the forms currently available.
Registered users also have the option of extending deadlines or appealing against decisions via ELSTER. When filling in the appropriate form, it is also possible to apply for a suspension of enforcement. On the other hand, claims to the fiscal court cannot be filed via ELSTER.
Filing a tax return in Germany with ELSTER
In "My ELSTER", the first step would be to select the "Income Tax" form. Once the user has specified the tax year, they can enter their data. Alternatively, if they have filed a tax return with ELSTER in the past, they can transfer their data from there. If they are using ELSTER for the first time, the next step is to enter their name and tax identification number, and, if applicable, their partner's data. There is now the option to activate a "system assistant", which is usually recommended.
Three pages of questions then follow concerning the user's professional and private situation, including:
- Are you an employee or a pensioner?
- Do you derive income from a business or self-employment?
- Do you have children, a travel contract, special expenses or extraordinary expenses?
ELSTER determines the appropriate systems on the basis of this and other information.
On the following page ("Certificates"), the data that is already available to the tax authority can be transferred to the tax return. In addition to personal master data, this includes income tax and church tax that is withheld by employers, along with the solidarity surcharge, contributions to health, long-term care, pension and unemployment insurance, or pension payments received. In order to be able to retrieve the receipts, a retrieval code must be entered, which can be requested by post under "Forms and Services" and "Manage Certificate".
Finally, it is necessary to fill in all the attachments that the tax authority prescribes on the basis of the data previously entered. ELSTER points out potential errors – for example, with regard to plausibility – during the final check of the data. Unless these errors are corrected, the tax return cannot be sent. The final step is to submit the return online.