Guide – Personal Income Tax Return For Your Schengen Visa
What Is A Personal Income Tax Return (ITR) For A Schengen Visa?
A “Personal Income Tax Return (ITR)” is a form submitted to a federal, state or local taxing agency to report income and calculate and pay taxes.
All countries worldwide have taxing agencies that oversee tax collection and provide forms that individuals must fill out to declare their incomes and calculate the percentage they are taxed.
A Personal Income Tax Return serves as proof of income, expenses, and other tax information.
Governments impose taxes on the income generated by businesses and individuals within their jurisdiction. The only difference is that the “Personal Income Tax Return” is for individuals only, while companies must provide a “Company Tax Return“.
Income taxes are a source of revenue for governments, and paying them is mandatory for all individuals and companies.
These taxes are used to fund public services, pay government obligations and public debts, and provide various goods.
In most countries, tax returns must be filed annually, although some governments may request individuals and businesses to provide the Income Tax Return once every six months (or another specified period).
As a general rule, the Income Tax Return proves your total income from all sources. Any taxes you’ve already paid, how much you want to claim in expenses, and if you are due a refund or have tax to pay – is all calculated from the process.
For most Schengen Embassies/Consulates, submitting your Personal Income Tax Return is a mandatory Visa requirement.
However, even for those Embassies/Consulates that consider it optional, we highly recommend you submit it as it can bring additional proof of your income and:
- Speed up your application process
- Increase your chances of approval
Also, most Embassies/Consulates request you submit your Income Tax Return for the last three years. However, you can also submit your Income Tax Returns for the previous four or five years – more is better.
If you are not a citizen of your country of residence: As a general rule, a foreign national will usually be considered a tax-resident in the country where they spend more than 6 months of the year. If this is applicable to your situation, you must submit your ITR when applying for a Schengen Visa.
For example, suppose you are an Indian citizen living in Australia for 8 months and applying for a visitor Visa. In that case, you must submit the ITR that proves you pay taxes in Australia.
The rules concerning the Personal Income Tax Return (ITR) vary by country. However, one of the two scenarios below should be available for most countries in the world:
- In some countries, the Income Tax Return is a required document for all citizens and residents. If you are employed, and your employer pays taxes from your gross salary, your Income Tax Return will allow you to get some money back on your tax return (because some expenses are deductible).
If you are self-employed, besides declaring deductible expenses, you must pay all the taxes to the government of your country of residence yourself. Even if you are unemployed, you must still fill out the personal Income Tax Return and declare that you have no income.
Getting your money back on a Tax Return means that your deductible expenses (for example, medical expenses) will allow you to pay fewer taxes.
- In other countries, only self-employed individuals must fill the Income Tax Return. At the same time, employees are required to fill it out only if they receive additional income for other work (such as extra income outside of the primary salary – for example, the income you get if you rent out a house that you own).
If employees have no additional income, they are not requested to fill the ITR because the employer pays the taxes from their gross salary, and the government of that country determines no deductible expenses.
Suppose this situation is applicable to you and you are not requested to fill out the ITR form because you are employed and have no extra income. In that case, you can ask the local tax agency of your country of residence for your Income Certificates for the last 3 years and submit them instead of the ITR.
To sum up – According to the Schengen Visa requirements, you must submit your Income Tax Return if:
- You are employed
- You are self-employed
- You are a student or unemployed – However, only a few Embassies/Consulates require students or unemployed Schengen Visa applicants to provide their Income Tax Return where they declare they have no income or declare their previous income (in case they have been employed previously).
If you are a long-term student or unemployed and have your Income Tax Return for the last 3 years we recommend you submit it. Alternatively, you can submit your Income Certificates requested to the local tax agency of your country.
Important: Suppose you do not have a Personal Income Tax Return (for example, you have an online job or work remotely for a foreign company, and you didn’t declare your Income to your Government tax authority).
In that case, we recommend you apply at an Embassy/Consulate/Visa Application Centre where submitting the ITR is optional.
Alternatively, you can apply for your Schengen Visa and replace the ITR with other documents that prove you have strong roots in your country of residence and financial stability to support your trip.
For example, you can submit additional documents that prove you own a house or you have a partner, child, or relative that you must take care of. For the Visa officers, it is more important to know that you have strong reasons to return to your country of residence and a sustainable income than to ensure that you are following your country of residency tax laws.
Of course, submitting the ITR can increase your chances of approval. However, not submitting it will not necessarily lead to your tourist Visa rejection – it depends primarily on whether you can prove your intentions to return to your country of residence or not.
The Importance Of The Personal Income Tax Return (ITR) For Your Schengen Visa
Below you will find the reasons why submitting your ITR is important for your application:
● Your Income Tax Return brings proof of your total income
Schengen Embassies/Consulates want to ensure that every Visa applicant has sufficient funds to cover all of their expenses while travelling through the Schengen Zone.
The employment documents that you must submit, such as your Certificate of Employment (COE), the No Objection Certificate (NOC) Letter, and your payslips, all provide evidence as to your ability to cover all of your expenses during your trip.
However, some Visa officers do not deem them as ‘enough’ because they indicate only your salary and not your total historical income (which your Personal Income Tax Return does).
Suppose that you are employed and you apply for a Schengen Visa, but the salary you receive is not enough to cover all of your expenses during your trip to the Schengen Area.
In this case, you can provide proof of additional income (if you have a second freelance job or you get money from a house you rent out). As a result, the Visa officers will be able to see that you have enough money to pay for all of your expenses during your stay in a Schengen State.
Also, even if your salary is high enough to cover all of your expenses and you still have side Income, we recommend you submit your Personal Income Tax Return. It will provide additional value to your application – the more evidence you can provide, the better.
Important: If you do not have enough funds to cover the expenses for your trip to Europe (e.g., flight and hotel reservations, travel health insurance, day-to-day expenses, etc.), you should consider getting a sponsor and submitting a sponsorship invitation letter.
● Your Income Tax Return brings additional proof that you have a stable job in your country of residence
Having a stable job (no matter if you are employed or self-employed) means that you get a specific salary every week or month and pay all of the federal and state income taxes.
In other words, paying taxes means that you respect your legal duties to the government of your country of residence, and a stable job allows you to cover all of these duties.
The immigration Visa officers need to ensure that you have a stable job in your country of residence (even if your employer is off-shore and you declare your salary locally) because they need proof of your intentions to return from the Schengen Area.
Please note that the main reason why some applicants get rejected is that they do not bring enough proof of their intentions to return to their countries of citizenship or residence.
As a result, Embassies/Consulates may believe that they might have intentions to remain within the Schengen Area illegally and overstay their visas.
To sum up, your Income Tax Return is important because the Visa officers want to ensure that you have enough money to cover all of the expenses for your trip to the Schengen Area and you have strong roots in your country of residence.
Anyway, the Visa officers are not tax agents. They are not actually interested if you pay all your taxes before the deadline. Also, they will not verify your deductions.
The key for you is to check that your Income Tax Return does not contain any errors and the information on it matches the information on your other documents.
However, suppose you’ve made a mistake on your Income Tax Return (as errors can occur when filling out the Income Tax Return form or from the Government office).
This mistake won’t necessarily lead to the rejection of your Schengen Visa, as long as you can prove your intentions to return to your country of residence and that your salary plus savings are enough to cover your trip to a Schengen country.
How To Get A Personal Income Tax Return (ITR) For Your Schengen Visa?
You can get your Personal Income Tax Return from a Government tax authority or use a 3rd party local tax agency in your country of residence.
Usually, there are three ways you can fill your Income Tax Return according to the rules of your country of residence:
- Filling an online Income Tax Return form and submitting it through the portal of a Government Tax Authority
- Filling the form on the computer or by hand and submitting it at the counter of a Government Tax Authority
- Filling the form through a 3rd party local tax agency, which will incur fees but is quicker and easier
If you have filed your Income Tax Return and are up to date but lost or misplaced the physical documents, you can use one of the methods mentioned above to obtain a copy.
If you have filed your Income Tax Return via an online portal, it is more than likely that you can download a copy of it by logging in to your account created on the agency’s portal.
If you are only able to discuss over the counter, it is more likely that you can get a copy after making a request directly at the counter of your local Government Tax Authority or 3rd party tax agency.
However, we suggest that you contact the authority or agency by writing an email and asking them what steps you need to follow to get a copy of your historical ITR.
If you are self-employed and have an accountant we suggest that you discuss with them to get copies of your ITR (unless you do not have them already).
Common Mistakes To Avoid When Submitting An Income Tax Return (ITR) For The Schengen Visa Application
When you submit your Income TaxReturn to the Embassy/Consulate, make sure you avoid making one of the following errors:
● Submitting Tax Returns that prove you paid your back taxes a short time before applying for the Schengen Visa
If you have tax arrears or outstanding tax debts and pay them only in time for you to apply for your Schengen Visa, the Visa officers will probably notice this.
A recent clean-up of your Income Tax Returns will not necessarily lead to your Schengen Visa’s rejection.
However, paying all your back taxes on the same day only for your Schengen Visa application will not make a good impression on the Visa officers.
● Submitting Tax Returns that prove you have arrears and back taxes
Submitting a Tax Return that shows you owe a small debt to the government of your country of residence should not be a problem for the Visa officers. But if you show them that you owe the government a high amount of money due to unpaid taxes (Government loans are acceptable), you will most likely make a wrong impression on the Visa officers, as they may believe that:
1. If you cannot afford to pay back taxes, you cannot afford to cover your expenses for the trip to the Schengen Territory
2. If you do not pay back taxes, you are not a responsible and trustworthy person, and they may believe you shouldn’t enter Europe for this reason.
● Submitting a Tax Return that shows a huge gap between the income you declared and the one you receive in your bank account
Suppose there is a massive gap between your Tax Return and your bank statement (meaning that the income on your Tax Return is much lower than the one you actually get).
In that case, your application might raise some red flags – not because Embassy/Consulate officers are interested to know if you declare and pay all the taxes. Still, they might ask themselves what the ‘real’ source of your income is (as they may assume your family or partner is transferring money into your account instead of it coming from an employer).
If they do not have enough proof of your income sources, they may believe that you get your money from an illegal source, and they may reject your Visa.
Of course, they still care about whether you declare and pay all taxes or not, but for them, it is more important to know that you have enough money (coming from a legal source) to cover your expenses during your trip to the Schengen Region.
However, if this situation is applicable to you, below you will find two options you may want to consider:
- Not submitting your Income Tax Return in case the Embassy/Consulate consider it as an optional document
- Submitting other additional required documents that prove the source of your income. For example, if you get money from a house rental and you did not add this source of income to your Tax Return, you can submit a document that proves you own that house (it will also help you bring additional proof of the roots you have in your country).