There is no separate tax on capital gains. Capital gains are subject to income tax as regular income however: there is no capital gains tax on a property used as a private home there is no capital gains tax on a property held for more than 10 years capital gains on shares are taxed at a…
Germany has concluded Double Taxation Agreements with most countries around the world (www.bundesfinanzministerium.de ). These Double Taxation Agreements determine which country has the right to levy tax on your income. These are the rules to make sure you are not taxed twice on the same income by providing a system of tax exemptions or tax credits…
The most frequent situation we come across for the purposes of getting German pension contributions refunded is the following: – You have worked in Germany as a regular employee for less than 60 months – You have paid into the German pension system during this time – You do not hold an EU citizenship – You…
Income tax is paid by employees on a monthly basis at the source through a withholding mechanism. Self employed individuals need to make a projection of their income for the tax year. Based on this projected figure, the tax office will work out a preliminary tax bill. This tax bill is then paid in four…
Is Foreign Income Taxed in Germany? If you live and work in Germany you are usually taxable in Germany on your foreign income worldwide. All your income needs to be reported to the German authorities. If you have income outside of Germany the Double Taxation Treaty between Germany and the country where your income comes from…
Your Finanzamt will ask you to initially submit monthly VAT returns for your VAT taxes (unless you are registered as a “Kleinunternehmer” – a micro business).You will have to report your monthly VAT liability to the Finanzamt and make VAT payments accordingly. The reporting (“Umsatzsteuervoranmeldung”) is done electronically via https://www.elster.de/eportal/start where you also find the relevant forms. At…
For tax purposes, nationality is only a relevant factor in very rare cases. Many tax benefits available to German nationals are equally available to EU nationals, but not in all cases to non-EU nationals. There is no specific “Expat Tax Status” in Germany like you find in some other jurisdictions. In other words: As an…
If you are a single individual who has nothing but income as an employee and who has worked in Germany for the full year you have no obligation to file a German tax return at all (this can be different for married couples). However, you can voluntarily file a tax return if you expect a…
How to Register as a Freelancer/Contractor? You need to register with your local Finanzamt as “selbständig”. You can find the required registration form at: https://www.formulare-bfinv.de Your Finanzamt will then issue a tax number for you. The registration is not as complicated as the 8 page form would suggest. You need to provide information on your…
Can I Submit Forms Online? You can submit your German tax forms online at https://www.elster.de/eportal/start You need to make sure to download (for free) the most current version of the tax software onto your system. Alternatively you can also get the required software (for free) on CD-ROM from your local Finanzamt. Please note that you also need…