© RFP Steuerberatung GmbH

TAX INFO :

Tax Information for DoD Contractors, and other corporations with HQ in the States:

American companies with headquarters in the USA and operating a German-based branch office are subject to German taxes: Corporations:  Corporate Income Tax: Tax Base: taxable  income earned in Germany Tax Rates: 15%  plus  5.5% Solidarity Tax Trade Tax: Tax Base: taxable income earned in Germany Tax Rate: 17.6% (for Ramstein) The trade tax rate depends upon the location of the local branch. …………………………………………………………………………………………………………………………………………………………………………………………………………… Partnerships (non-resident) Partners in a business registered as a partnership in Germany  are subject to income tax and trade tax:     Income Tax: Tax Base: taxable income earned in Germany Tax Rates: from 25% to 40% (progressive)  plus  5.5% solidarity surcharge Trade Tax: Tax Base: taxable income earned in Germany Tax Rate: from 0 % up to 17.6% (graduated basic tax rate) …………………………………………………………………………………………………………………………………………………………………………………………………………… Value Added Tax (VAT): VAT must be collected on all sales and services at a rate of 19%.  VAT forms may be used to exempt from this. Services performed directly for the US Department of Defense are often subject to value added tax (VAT). Please buy VAT forms in a bookstore. DFAS accountant needs to sign and stamp the VAT forms. VAT paid for business operating expenses is recoverable. American companies who have employees working in Germany, but no office and no representative may apply for a wage tax number only for German payroll purposes. We also assist American corporate clients with regard to exemption of German social security for American employees   …………………………………………………………………………………………………………………………………………………………………………………………………………… German Social Security System : The German Social Security System includes 4 elements:                                        employee<>employer •          Retirement insurance                                  9,3%                    each party •          Unemployment insurance                            1,5%                    each party •          Health insurance company                          7,3%                     each party                                              •          Long-term nursing care                               1,175%                 each party •                                                                            0,25%   increase for childless taxpayers                                   Half of the employee contribution is withheld from the salary, the other half will be matched and paid by the employer. Advantages for Employee: •          Standard German Health Care Services •          German Kindergeld (child benefit) •          Unemployment benefits (provided that you have worked 12 months on the German economy)      •          Possible Retirement refund (please ask for details) …………………………………………………………………………………………………………………………………………………………………………………………………………… Home-based business and other businesses: First, ask your Installation Commander for permission in writing. (only home-based business owners) You must register your business with the Ramstein Rathaus or local community (Verbandsgemeinde). Don´t register yourself and your family as residents of Germany. It will cause some problems. You are bound by German law to register your business before start up. There is no difference if you sell/provide your products/service only to American citizens (Military ID-card holders) or to the general public. 1. Obtain permission in writing from your Installation Commander. 2. Register and obtain a Business License at your local responsible authority (Rathaus or Verbandsgemeinde). Freelancers don´t need to register their business. We help them to apply for a German tax number. 3. The local authority will send a copy to the responsible German tax office. 4. The German tax office (Finanzamt) will send you a questionnaire to complete and return. 5. Please fill in the information. If you would like any help, we are happy to assist you. 6. Return the questionnaire to the German tax office. 7. The tax office will issue you a tax number (Steuernummer). 8. Upon receiving the tax number, please make an appointment and we will set up your tax plan. …………………………………………………………………………………………………………………………………………………………………………………………………………… 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 …………………………………………………………………………………………………………………………………………………………………………………………………………… .
Direct Contact: +49 (0) 6371-96 23-0
German Tax Consulting Company
© RFP Steuerberatung GmbH

TAX INFO :

Tax Information for DoD

Contractors, and other

corporations with HQ in the

States:

American companies with headquarters in the USA and operating a German-based branch office are subject to German taxes: Corporations:  Corporate Income Tax: Tax Base: taxable  income earned in Germany Tax Rates: 15%  plus  5.5% Solidarity Tax Trade Tax: Tax Base: taxable income earned in Germany Tax Rate: 17.6% (for Ramstein) The trade tax rate depends upon the location of the local branch. ………………………………………………………………………………… ………………………………………………………………………………… ……………………………………… Partnerships (non-resident) Partners in a business registered as a partnership in Germany  are subject to income tax and trade tax:     Income Tax: Tax Base: taxable income earned in Germany Tax Rates: from 25% to 40% (progressive)  plus  5.5% solidarity surcharge Trade Tax: Tax Base: taxable income earned in Germany Tax Rate: from 0 % up to 17.6% (graduated basic tax rate) ………………………………………………………………………………… ………………………………………………………………………………… ……………………………………… Value Added Tax (VAT): VAT must be collected on all sales and services at a rate of 19%.  VAT forms may be used to exempt from this. Services performed directly for the US Department of Defense are often subject to value added tax (VAT). Please buy VAT forms in a bookstore. DFAS accountant needs to sign and stamp the VAT forms. VAT paid for business operating expenses is recoverable. American companies who have employees working in Germany, but no office and no representative may apply for a wage tax number only for German payroll purposes. We also assist American corporate clients with regard to exemption of German social security for American employees   ………………………………………………………………………………… ………………………………………………………………………………… ……………………………………… German Social Security System : The German Social Security System includes 4 elements:                                        employee<>employer •          Retirement insurance                                  9,3%                    each party •          Unemployment insurance                            1,5%                    each party •          Health insurance company                          7,3%                   each party                                              •          Long-term nursing care                               1,175%               each party •                                                                            0,25%   increase for childless taxpayers                                   Half of the employee contribution is withheld from the salary, the other half will be matched and paid by the employer. Advantages for Employee: •          Standard German Health Care Services •          German Kindergeld (child benefit) •          Unemployment benefits (provided that you have worked 12 months on the German economy)      •          Possible Retirement refund (please ask for details) ………………………………………………………………………………………………………………… ………………………………………………………………………………………… Home-based business and other businesses: First, ask your Installation Commander for permission in writing. (only home-based business owners) You must register your business with the Ramstein Rathaus or local community (Verbandsgemeinde). Don´t register yourself and your family as residents of Germany. It will cause some problems. You are bound by German law to register your business before start up. There is no difference if you sell/provide your products/service only to American citizens (Military ID-card holders) or to the general public. 1. Obtain permission in writing from your Installation Commander. 2. Register and obtain a Business License at your local responsible authority (Rathaus or Verbandsgemeinde). Freelancers don´t need to register their business. We help them to apply for a German tax number. 3. The local authority will send a copy to the responsible German tax office. 4. The German tax office (Finanzamt) will send you a questionnaire to complete and return. 5. Please fill in the information. If you would like any help, we are happy to assist you. 6. Return the questionnaire to the German tax office. 7. The tax office will issue you a tax number (Steuernummer). 8. Upon receiving the tax number, please make an appointment and we will set up your tax plan. ………………………………………………………………………………………………………………… ………………………………………………………………………………………… 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 ………………………………………………………………………………………………………………… ………………………………………………………………………………………… .
Phone: +49 (0) 6371-96 23-0
German Tax Consulting Company