Getting started as a freelancer in Germany can be quite complicated - and even more so if you don’t know which authority to talk to, especially when it comes to taxes. That's why we'll explain the difference between the Federal Central Tax Office (Bundeszentralamt für Steuern) and the Tax Office (Finanzamt), and which authority is responsible for which tasks.
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The former Federal Tax Office was dissolved in 2006 and divided into three new authorities. One of them is the Federal Central Tax Office, or Bundeszentralamt für Steuern, which is also often abbreviated as BZSt.
The BZSt is directly subordinate to the Federal Ministry of Finance and therefore also receives its tasks from the ministry. These tasks are also laid down in § 5 of the Financial Administration Act. The authority has its headquarters in Bonn and three additional offices in Berlin, Saarlouis and Schwedt an der Oder.
So far, so good. But if you take a closer look at the specific tasks of the BZSt, things get a bit more complicated.
According to its website, the BZSt is responsible for central tax tasks with national and international relevance. This includes the administration of federal taxes such as insurance taxes or the execution of the tax withholding procedure, i.e. the transfer of the wage tax amount for employees by employers.
However, not only the administration of taxes, but also the collection and administration of data is an essential task of the BZSt. For example, the authority collects all data that can be assigned to a taxpayer in connection with the tax identification number.
➡️ Freelancing in Germany: Here’s what you need to know about tax numbers
The tax office, on the other hand, is primarily responsible for assessing and collecting taxes. This means that for every taxable person in Germany, it checks how much tax has to be paid, issues an individual tax assessment and, if the tax is not paid, also initiates a procedure for collecting it.
This concerns quite different types of taxes, because in addition to the regular income tax, the tax office is also responsible, among other things, for the determination and collection of VAT.
💡Tip from Accountable: Need help with your tax return? Accountable can help! Download our free app now and streamline your accounting.
Since there are over 81 million people living in Germany, there are also a lot of tax offices across the country that are tasked with managing people's taxes depending on where they live. So if you live in Berlin, for example, you will also receive your tax notice from the local office and communicate with a local official if you have any questions.
💡Tip from Accountable: Did you get a letter from the tax office that you don’t understand? We have listed the most common letters from the tax office here. We also have a free AI tool that translates and explains the letters for you! Test it now!
The Federal Central Tax Office is more of a background agency for taxpayers. This means that you will probably not have any direct contact with the BZSt. Instead, the tax office is your direct point of contact for any tax-related questions, because this is where your tax assessment is issued and your tax burden is calculated.
The only exception is the allocation of the tax identification number, because this is not actually allocated by the tax office, but by the Federal Central Tax Office. So if you receive a tax ID for the first time or want to have your number sent to you again, this is done via the BZSt.
➡️ Don’t know your tax ID? You can retrieve it here.
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Author - Sophia Merzbach
Sophia has been a key member of the Accountable team for many years, bringing a unique blend of journalistic precision and in-depth tax expertise to her work.
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