Depends. I used to be a normal employee - 1 Job, where “payroll tax” (?) was withheld by the employer, plus some interest from capital, that was below the free bracket. So I didn’t file anything. (The tax law itself EStG in Germany says that everybody is required to fill out a declaration at the end of the year. The rules for application AO say that for People with normal circumstances, exception is made to save them and the finance Office time and effort).
Then they changed the rules for People with capital Investments: if I have Investments with more than one bank, I have to declare full tax form, so they can make sure I used only partial free bracket for each bank and not the full amount (e.g. the full bracket is 800 Euros, so I can split it among 4 Banks for 200 Euros each, but it’s forbidden to use 800 Euros on each bank). I think they changed it again a few years ago, saying that using this newfangled IT Thing, Banks can Report how much bracket I used and the tax office’s Computers can tally it up.
However, some time ago I bought into a solar fund, and now I’m an entrepeneur. Technically, a silent Partner (of several hundred) but still, my income no longer falls into “employed” or “interest from capital” but “income from entrepeneurship”. So now I’m really required to fill out a tax form.
Another aspect is that the tax Offices of my City have been overburdened for years and years and… since the mid90s. When I get a letter, it says that the Person doing the work doesn’t sit in my City, he works in the tax Office 50 or 100 km away and gets a parcel of tax forms from my City on top to deal with. So the tax Office doesn’t get around to Mailing out the tax forms automatically to everybody who might be required to declare. In other cities, People have told me that they get These tax forms regularly even when they fall under the exception and no longer have to apply.
Also, my state switched to electronic declaration of taxes as mandatory several years back (very badly done - as is usual in Bavaria, with many complaints from small Business). It’s mandatory to do it online for businesses, and citizens who can’t do it online can come into the tax Office and get forms and help.
It takes me about 3 hours to look through my bank Statements to tally up my insurances, about 2-3 hours to tally up my different capital interests and deductable donations (additionally if some charity orgs. messed up and sent the wrong Statement or None at all, so I have to email them and wait… grrr. Some can do it competently, others … not). Then another 3 hours to enter it into the bloody form, which for reasons unknown changes every year. Yes, obviously the tax code is changed every year; that’s no excuse why “normal interest” is entered on line 14 this year, and line 15 next year, or why the idiots who make These forms don’t write the paragraph of the tax code next to the line so one could look up what they mean, instead leaving a lot of Terms very unclear.
Most Banks have accomodated their Clients, so when I get the yearly Statement of interest received, it says "Enter this amount on line 14 for interest received, enter this amount in line 50 for bracket applied, enter this amount on line 35 for foreign tax applied…) Which makes it easier.
There has been mention that they want to reduce the effort for the tax officers (and the citizens as side effect) by requiring the institutions to send all documentations electronically directly to the tax Office. So far, the bank/ charity/ insurance sends a Statement on paper to me, I add things up (Excel at least) copy/ scan them for proof, and send the whole Thing by mail to the tax Office. Obviously that’s oldfashioned.
As for help, there have been books that help you with your tax declaration for Ages, and CD-ROMs with different Software also for several decades. Some are adapted American programs that do your normal finances during the year, many are only taxes.
In Addition, there are Clubs called Lohnsteuerhilfevereinigung (Pay roll tax help association) where for a small yearly Membership fee you can get help, provided your only income is as employee and not-unusual capital Investments.
For everybody with complicated Investments and no interest in getting frustrated with These darn forms and badly worded language, there are tax advisors. So my mother (who rents a flat, which is “income from rented properties” in Addition to a normal Pension and small usual Investments) doesn’t bother, just collects every Statement over the year and once a year goes to the tax advisor who does the whole Thing in a few hours. (His fee can be subtracted).
Those citizens who have complicated tax, or (elderly, foreign,…) have Problems understanding the forms, but can’t afford a tax advisor: they can go to the tax Office themselves and ask for help. The tax officers are required by law (and confirmed by Courts) to advise the citizens to their best interest in how to declare things.
What they can’t do, what a tax advisor does, and where the real value for the rich People (not normal citizens) is, is give advice on how to invest Money in order to save taxes. This advice must be financially Sound enough to work, and legal enough to not get the Client into Trouble for tax Evasion (like several years back when the Tax officers raided a bank because the Bankers had given Investment advice for Luxembourg, which turned out to tax Evasion instead of legal loopholes. Since Bankers learn Banking, not tax laws, so their Information is not as reliable as tax advisors). And tax advisors who do give bad advice can be taken to court by their Clients, they are coulpable.
