Bundeszentralamt für Steuern (BZSt) and Finanzamt: What’s the difference?
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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.
- What does the Federal Central Tax Office do?
- What does the Tax Office do?
- How the two authorities differ
What does the Federal Central Tax Office do?
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.
What does the tax office do?
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.
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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.
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This is the difference between the two authorities
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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