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: firstname.lastname@example.org
Frequently Asked Questions
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.
I am living in Colorado. I own a rental property in Germany. Do I need to file a German income tax return?
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.
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
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.
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:
Spouses, who are German citizens
Spouses, who are citizens of a member state of the European Union/ European Economic Area
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)
How much is the child benefit?
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.
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)
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.
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 :
Your American customers (ID-Card holder) provide you a VAT-Form.
If your business´ annual revenue is not more than 17,500 Euros from January to December, you can use the small business rule.
When are German income taxes due? Can I file the tax declarations later?
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)
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?
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