Please note:
This information is
intended as short
summary and is subject to
change.
A detailed consultation is
recommended to discuss
your individual
requirements.
We speak English and are
happy to assist you with
regard to all of your tax
and accounting
requirements.
For more information
please visit our office or
contact us: lang@rfp.tax
© RFP Steuerberatung GmbH
FAQs :
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Do I need a work permit? I am a spouse of Active Duty and want to work for a
US employer on Air Base. Do I have to pay German taxes?
According to Article III of the NATO Status of Forces Agreement (SOFA) dependents
of the US Forces need a valid passport with the NATO Status of Forces
certificate/stamp therein.
Article III, Paragraph 3
„Members of a civilian component (for example: AAFES) and dependents
shall be so described in their passport.“
The German Aliens Act does not apply to individuals covered by the SOFA Status.
These people do not need a work permit/residence permit.
With regard to taxes: Yes, you have to pay German wage tax. The employer
needs to withhold them and has to transfer them to the German tax office. You
will be treated like a single and a non-resident. You are not required to file a
tax declaration. We also need to talk about Social Security Contributions.
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I am living in Colorado. I own a rental property in Germany. Do I need to file a
German income tax return?
Yes, you do. The rent is considered German income. Expenses for mortgage
interest, maintenance, depreciation, property tax, and notary fees are deductible.
Any profit is then taxable income.
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I earn interest and/or dividends from American investments. Are these taxable
in Germany?
This depends upon your residence status. If you are a permanent resident, this is
taxable.
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How much of the German income tax, church tax and solidarity surcharge am I
required to pay?
Income tax, just as in USA, is based on your monthly gross salary and your tax
class. Tax accountants use a special tax table to determine the exact amount.
The solidarity surcharge is 5.5 % of the income tax amount.
Provided that you are a member of a German church, there is also a tax
withholding of 9 % of the income tax amount.
The above mentioned taxes are withheld from your gross monthly salary. The
employer transfers the total amount to the German IRS on the 10th of the next
month.
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Do I have to file a German income tax return? I am working in Germany for an
American employer. I am a military spouse with the SOFA stamp in my passport.
According to the income tax laws, limited taxable employees are not required to
file an annual tax return. You are treated like a single. However, some tax
allowances (e.g., travel expenses from home to work, second residence expenses)
will result in material tax savings, if appropriate applications are filed by us.
You might be entitled to receive some benefits. Please call us for more info.
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Can I claim the German child benefit?
Generally, members of the US military and DOD civilians do not have a claim to
German child benefit for their children living in Germany. The exceptions are:
1. Spouses, who are German citizens
2. Spouses, who are citizens of a member state of the European Union/ European
Economic Area
3. Spouses, who are American citizens and have a gainful employment at a
company that withholds social insurance contributions (e.g., unemployment
insurance contributions to the federal labor service). The prerequisite is that
they fall under the limited taxable status. (SOFA stamp in their passport)
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How much is the child benefit?
204 Euro monthly for each child.
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Do I have to pay German retirement insurance?
If you are an employee and you are staying more than 183 days in Germany, you
have to pay contributions to the public German retirement insurance - provided
you are not sent by your USA based employer -.
These contributions may be redeemed in the USA.
Prerequisites are:
- US citizenship
- you are going to return to USA or you are in USA
- contributions are paid into the German system for less than 60 months
If you pay pension insurance contributions for more than 60 months, you are
entitled to a German pension (Social Security Office in USA can assist you).
However, under certain circumstances a complete exemption of German social
insurance is possible and can be checked by us. (Certificates of Coverage)
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I am an American retiree. Do I have to file a German tax declaration?
If you have a residence permit you are considered as an ordinary resident. You
have to file a German tax declaration in case you receive a Social Security Pension,
interests and dividends.
Social Security Pension must be taxed like a German pension.
You also have to declare the Military and Civilian Pension but it will not be double
taxed.
We need 1099 R forms in order to declare the world-wide income.
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Am I subject to German taxes if I am a sole proprietor in Germany?
If so what kind of taxes?
You are subject to income-tax and trade-tax laws. These taxes depend upon your
profit.
In general you are subject to sales tax (VAT). Current VAT rate is 19%.
Exceptions are :
1. Your American customers (ID-Card holder) provide you a VAT-Form.
2. If your business´ annual revenue is not more than 17,500 Euros from January to
December, you can use the small business rule.
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When are German income taxes due? Can I file the tax declarations later?
Your tax return is due in May of the following year. Your tax adviser can ask for an
extension if necessary.
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I am an American speech therapist married to a Civilian. How can you help me
to establish my business?
You don´t need to register your business at the town hall. You need to apply for a
German tax number by a questionnaire. We would like to assist you with filling
out. At the beginning of a calendar year we need your income and your expenses in
order to file your taxes. (single tax declaration)
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I am a German teacher married to an Active Duty. We are stationed in Germany
and I want to work on the German economy. Which tax class do you
recommend?
Please ask for tax class 1 like a single. Please don´t ask for tax class 3 as your
husband is Active Duty.
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Direct Contact: +49 (0) 6371-96 23-0
German Tax Consulting Company