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German income tax return for non-residents (ESt 1 C)

If you had neither a residence nor your habitual abode in Germany during the calendar year but earned German-source income within the meaning of § 49 EStG, you are subject to limited tax liability (beschränkte Steuerpflicht, § 1(4) EStG) and declare that income on form ESt 1 C. Before filling it in, there is a fork: if at least 90 per cent of your income for the year is subject to German income tax, or your other income does not exceed the basic allowance (Grundfreibetrag), you can apply to be treated as fully liable (§ 1(3) EStG) — and ELSTER then tells you to use NOT the ESt 1 C but the ESt 1 A. The difference matters: under limited liability, taxable income is increased by the basic allowance when the tax scale is applied (§ 50(1) sentence 2 EStG).

Up to date for 2025 — verified on September 23, 2026Official procedure, no printed formGuide: about 60 min

Deadlines

Seven months after the end of the calendar year
General deadline for returns relating to a calendar year, unless tax legislation provides otherwise (§ 149(2) sentence 1 AO)
Last day of February of the second following year, where a tax adviser prepares the return
§ 149(3) no. 1 AO — in individual cases the tax office may call for the return earlier, setting a period of four months after notification of its order (§ 149(4) AO)
The fork before filing: application under § 1(3) EStG
The application requires a certificate from the competent foreign tax authority stating the amount of income not subject to German income tax (§ 1(3) sentence 5 EStG) — obtain it in your country of residence in good time

Documents to prepare

  • ELSTER access with a certificate
  • Evidence of your residence and habitual abode during the calendar year
  • A list of your German income, each item assigned to a number in § 49(1) EStG
  • A list of your foreign income for the year, for the 90 per cent test
  • Receipts for expenses economically connected with the German income
  • Certificates of tax withheld (wage tax, investment income tax, § 50a EStG withholding)
  • For an application under § 1(3) EStG: the certificate from the foreign tax authority
See the procedure on the official site

No form is attached to this procedure: the link leads to the official page that describes it.

What this page gives you

The guide above and the link to the official site. ActioFin does not produce any document for this page: whatever you fill in or file is done on the official medium.

Who this applies to

  • Individuals with no residence or habitual abode in Germany in the year declared who earn German-source income within § 49(1) EStG — these are the conditions ELSTER states for the ESt 1 C
  • For example: letting property situated in Germany (§ 49(1) no. 6 EStG), self-employed work performed or exploited in Germany or for which a fixed base or permanent establishment is maintained there (no. 3), a trade or business with a German permanent establishment or permanent representative (no. 2(a))
  • NOT anyone who wants to and can make the application under § 1(3) EStG: ELSTER expressly points them to the return for unlimited tax liability (ESt 1 A)
  • NOT for income on which income tax is deemed settled by withholding from wages, from investment income or under § 50a EStG (§ 50(2) sentence 1 EStG) — subject to the exceptions in sentence 2, such as the income of a German business
  • NOT anyone resident or habitually abiding in Germany: they are fully liable (§ 1(1) EStG) and file the ESt 1 A
  • The trigger is therefore geography, not the type of income: where you live decides the form, where the income comes from decides whether Germany taxes it

Worked example

Claire Morel, a graphic designer in Lyon, lets a flat in Leipzig

Claire lives and works in France; she has neither a residence nor a habitual abode in Germany. Her flat in Leipzig produces letting income (Einkünfte aus Vermietung und Verpachtung) of 9,000 euros — German-source income under § 49(1) no. 6 EStG because the property is situated in Germany. She is therefore subject to limited tax liability (§ 1(4) EStG). She first tests the fork in § 1(3) EStG: her French design income is 45,000 euros, so of 54,000 euros in total only about 17 per cent is subject to German income tax — far below 90 per cent — and her other income clearly exceeds the basic allowance. The application is ruled out; Claire selects the ESt 1 C for the calendar year in ELSTER. As expenses (Werbungskosten) she deducts only what is economically connected with the Leipzig rental income (§ 50(1) sentence 1 EStG), not the costs of her studio in Lyon. When the tax is computed, her taxable income is increased by the basic allowance for the purpose of applying the scale (§ 50(1) sentence 2 EStG): the allowance does not shelter her income the way it shelters a resident's. The scale itself and the basic allowance are carried by the einkommensteuer-tarif calculator. She files within seven months after the end of the year (§ 149(2) sentence 1 AO).

How to fill it in, step by step

  1. Check your residence and habitual abode in the calendar year: if either was in Germany, you are fully liable (§ 1(1) EStG) and use the ESt 1 A.
  2. Assign each item of German income to a number in § 49(1) EStG — only the income listed there gives rise to limited liability (§ 1(4) EStG).
  3. Set aside income on which tax is deemed settled by withholding (§ 50(2) sentence 1 EStG), and check whether an exception in sentence 2 applies.
  4. Work through the fork in § 1(3) EStG: the share of German-taxed income in your total income (at least 90 per cent), or your other income compared with the basic allowance.
  5. If the fork is met and you want to apply, obtain the certificate from your foreign tax authority (§ 1(3) sentence 5 EStG) and select the ESt 1 A in ELSTER.
  6. Otherwise log in to Mein ELSTER, select the income tax return for limited tax liability (ESt 1 C) and the calendar year.
  7. Enter business expenses or Werbungskosten only insofar as they are economically connected with your German income (§ 50(1) sentence 1 EStG).
  8. Submit the return within the deadline in § 149(2) sentence 1 AO and check the assessment notice within the objection period.

Good to know

  • According to ELSTER, the ESt 1 C also contains the application for the employee savings bonus (Arbeitnehmer-Sparzulage) and the return for determining the remaining loss carry-forward.
  • Under limited liability a number of provisions do not apply, among them § 32 EStG (children, child allowances), § 32a(6) EStG, §§ 33, 33a and 33b EStG (§ 33: extraordinary expenses) and § 35a EStG (household employment, household services and tradesmen's services) — so § 50(1) sentence 4 EStG.
  • Anyone treated as fully liable under § 1(3) EStG who is a national of an EU or EEA state is subject, for the application of § 10(1a) and § 26(1) sentence 1 EStG, to the special rules of § 1a EStG.
  • German income that a double taxation treaty allows Germany to tax only up to a limited amount counts, for the 90 per cent test, as not subject to German income tax (§ 1(3) sentence 3 EStG).
  • The basic allowance used as the yardstick in § 1(3) EStG is to be reduced insofar as necessary and appropriate in view of conditions in the country of residence (§ 1(3) sentence 2 EStG).
  • Even after an application under § 1(3) EStG, withholding under § 50a EStG must still be carried out (§ 1(3) sentence 6 EStG); its rates are computed by the steuerabzug-beschraenkt-steuerpflichtige calculator.
  • For income within § 50a(1) nos. 1, 2 and 4 EStG an assessment may be applied for (§ 50(2) sentence 2 no. 5 EStG); it is then carried out by the Federal Central Tax Office (Bundeszentralamt für Steuern, sentence 9) and is open only to nationals of an EU or EEA state resident in one of those states (sentence 7).

Common mistakes

  • Filing the ESt 1 C although the conditions of § 1(3) EStG are met and the application would be more favourable — ELSTER expressly directs such cases to the ESt 1 A.
  • Claiming the basic allowance as a resident would. Under limited liability taxable income is increased by it for the scale (§ 50(1) sentence 2 EStG).
  • Deducting costs connected with foreign income. Only what is economically connected with German income is deductible (§ 50(1) sentence 1 EStG).
  • Declaring income on which tax is already settled by withholding (§ 50(2) sentence 1 EStG), or conversely leaving out the income of a German business, to which that settlement does not apply (sentence 2 no. 1).
  • Applying under § 1(3) EStG without the certificate from the foreign tax authority — it is a condition (§ 1(3) sentence 5 EStG).
  • Confusing the ESt 1 A and the ESt 1 C: the test is residence or habitual abode in the calendar year, not nationality.

Frequently asked questions

I live in France and have German rental income. Which form do I need?

In principle the ESt 1 C: with no residence or habitual abode in Germany, income under § 49 EStG makes you subject to limited liability (§ 1(4) EStG). If you meet the conditions of § 1(3) EStG and apply, ELSTER tells you to choose the ESt 1 A.

When is the application under § 1(3) EStG worthwhile?

It is possible where at least 90 per cent of your income for the calendar year is subject to German income tax, or your other income does not exceed the basic allowance (§ 1(3) sentence 2 EStG). It avoids the increase of taxable income by the basic allowance that § 50(1) sentence 2 EStG imposes under limited liability.

Must I declare income from which tax has already been withheld?

For income subject to withholding from wages, from investment income or under § 50a EStG, income tax is as a rule deemed settled for persons with limited liability (§ 50(2) sentence 1 EStG). Sentence 2 lists the exceptions, such as the income of a German business or an assessment applied for.

Can I deduct my costs in France?

Only insofar as they are economically connected with your German income (§ 50(1) sentence 1 EStG).

When is the return due?

No later than seven months after the end of the calendar year (§ 149(2) sentence 1 AO); with a tax adviser, by the last day of February of the second following year (§ 149(3) AO).

Go further

Compute the related amounts

Related forms

Official sources

Read in German

Guide and document provided for information purposes only; they do not constitute personalised legal or tax advice. Check the recipient organisation's requirements and consult a professional if needed.