Deduct Legal Insurance From Taxes in Germany (2024)

GermanPedia

Key takeaways

• You can deduct the costs of work legal insurance from taxes.
• Landlords can deduct landlord legal protection insurance costs from their taxes.
• You cannot deduct the costs of other types of legal insurance from taxes.
• Legal insurance covers the out-of-court and in-courtcosts of legal disputes.

This is how you do it

• Ask your insurance provider to give the portion you pay as a work legal insurance premium in writing.
• Submit the legal insurance invoice as proof while filing the income tax return.
• Similarly, deduct the landlord’s legal insurance premium from taxes. You can deduct the landlord’s legal insurance costs from the rental income only.

Table of Contents

What is legal protection insurance in Germany?

Legal protection insurance covers the lawyer’s fee, court costs, witness costs, etc. It can save you thousands of euros in legal costs.

No one likes conflicts and disagreements. But they can still arise. You need legal advice and support to assert your rights in a dispute.

However, lawyers are expensive in Germany. You will pay around 250 € as a consultation fee to a lawyer in Germany.

Moreover, you’ll spend thousands of euros if the dispute ends in court. Hence, legal insurance is vital to support you during a legal dispute.

Can you deduct legal insurance costs from taxes in Germany?

Yes, you can deduct legal insurance costs from taxes in Germany. But only the costs of certain types of legal insurance.

There are five types of legal insurance in Germany

• Private legal insurance
• Work legal insurance
• Traffic legal insurance
• Tenant’s legal insurance
• Landlord’s legal insurance

You can deduct the costs of work legal insurance from taxes as work-related expenses. Landlords can deduct the landlord’s legal insurance costs from their rental income.

Costs of other types of legal insurance are not tax deductible.

Normally, you get legal insurance as a combination of two or more types of insurance. In this case, you can deduct the insurance cost related to your work from taxes.

We have created a cheatsheet to summarise all the expenses you can deduct to save taxes in Germany. You can download it for free here.

Cheatsheet to Save Taxes – Free Download

• Download the cheatsheet summarizing all the expenses you can deduct from the taxes.
• Maximize your tax savings by claiming expenses you don’t need proof of.
• Moved due to work, bought a new chair, repaired your rental apartment, etc. Claim all these expenses to save tax.

How much of the legal insurance premium is tax deductible?

• You can deduct complete insurance premiums from taxes if it’s only employment legal insurance. Submit the legal insurance invoice to the tax office (Finanzamt) as proof.
• Suppose you have a combination of two or more types of legal insurance. You can deduct the cost you are paying for the work legal insurance. The invoice from your legal insurance provider usually mentions it clearly.
• You can ask the legal insurance company to give you in writing the portion of the premium you pay for work legal insurance.
• Landlords can deduct the complete cost of landlord legal insurance from their rental income. You cannot deduct the landlord insurance costs from income other than rent.
• If you have a combination of two or more types of legal insurance, you can deduct the portion paid for landlord legal insurance from taxes.

How much does legal insurance cost in Germany?

The cost of legal insurance depends

• type of legal insurance you take
• who is covered – you, your partner, your whole family
• use of legal insurance in the last five years
• deductible

Legal insurance can cost between 150 € and 400 € per annum. You can compare the legal insurance offers on Check24* or Verivox*. If you want a service in English, check Getsafe* legal insurance and Feather*.

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Insurance Legal Insurance in Germany