This is complicated (and I suspect nobody will want to give me free advice (other than "you need an accountant" ).
Anyway here goes.
We left Germany at the end of 2007 (actually on 31 December) to live in Australia (after a number of years in Germany). We are not really settled in Australia and now planning to come back. What is complicating matters is my daughter is nearly 17 and would like to complete here schooling here in Australia so there is a possibility that I will travel back alone and the rest of the family stay here (until October 2009).
From a tax point of view I have earnings that were paid in Germany in 2008 (my 2007 bonus)
I then have income in Australia (under a temporary residents visa - which means I do not need to declare my German income here)...still following?
I plan to start work again in Germany in December 2008 which means I would not have been away from Germany for a complete calendar year.
Sooooooooooo, my questions are this:
1. Is there any (tax) benefit in my being away from Germany for a complete financial year (i.e. should I delay my return until January 2009)?
2. Where would I pay tax for 09? (bearing in mind that the Australian tax year runs to June but the German tax year runs to December)?
3. Would I need to declare my Australian income in Germany?
4. Because the family may not (initially) be coming back with me I may also have the option to come back to Switzerland first (Zurich). Any tax advantage to doing that?
The sums of money involved are not insignificant. I have probably 2-3 months in which to make choices so I have some flexibility
Clearly I want to make sure everything I do is legal () but I also want to be treated fairly and pay as little as possible!
Any tips or hints much appreciated.
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Complicated international tax question
Declaring in Germany, Australia, and Switzerland
).
) but I also want to be treated fairly and pay as little as possible!
Your situation is complex and you would definitely need an accountant. I had a similar but less complex problem and I contacted Thomas Zitzelsberger from this site, and he sorted it all out. He does it all over the phone, so you could talk to him now.
Anyway, in my situation I worked in Australia for half the year, then I came to Germany. For the first half of the year I paid tax in Australia. Then when I got to Germany, I had to tell them how much tax I had earned in that whole year but they took into consideration what I had paid in Australia, so I didn't have to pay that again.
I don't know why you don't have to declare you German income to the Australian authorities though. If you are living in Australia, you should be paying tax on that income in Australia.
Anyway, in my situation I worked in Australia for half the year, then I came to Germany. For the first half of the year I paid tax in Australia. Then when I got to Germany, I had to tell them how much tax I had earned in that whole year but they took into consideration what I had paid in Australia, so I didn't have to pay that again.
I don't know why you don't have to declare you German income to the Australian authorities though. If you are living in Australia, you should be paying tax on that income in Australia.
Thanks.
I could be wrong but I am in Australia on a 457 temporary visa which under current rules means (I think) that I am only liable on my Australian earned income.
I could be wrong but I am in Australia on a 457 temporary visa which under current rules means (I think) that I am only liable on my Australian earned income.
I'm kinda looking at this and thinking...
The 2007 bonus (paid in 2008) - I assume you paid tax already on that in Germany?
Then the australian 2008 earnings to date you have also paid any necessary tax locally in Australia?
Also wondering what date you officially deregistered in Germany, as with the 2008 bonus earnings I suspect you could still have an
issue claiming that your TRULY left Germany for the 12 months etc. They dont really like people attempting to leave for exactly 366 days,
and then coming straight back - cos its like you never really quite left. (I know 'cos discussed with an accountant once before).
So overall I am thinking...
Why sweat it? Why go to Zurich? Why delay your December arrival? Why get into a row with the Germans as to whether you really left?
It sounds like the only tax at issue is your Australian income, and you should have paid some locally on that? You will not get taxed twice, and in theory
your ONLY income for 2008 will have been the ozzie income and your 2007 bonus.
If it was me, I would calculate what tax would be due if I DECLARED all 2008 income as taxable in Germany (less any tax already paid overseas in Australia).
Might all work out to be a non-event. Unless you took your bonus tax free for 2007 AND paid no tax in Australia?
The 2007 bonus (paid in 2008) - I assume you paid tax already on that in Germany?
Then the australian 2008 earnings to date you have also paid any necessary tax locally in Australia?
Also wondering what date you officially deregistered in Germany, as with the 2008 bonus earnings I suspect you could still have an
issue claiming that your TRULY left Germany for the 12 months etc. They dont really like people attempting to leave for exactly 366 days,
and then coming straight back - cos its like you never really quite left. (I know 'cos discussed with an accountant once before).
So overall I am thinking...
Why sweat it? Why go to Zurich? Why delay your December arrival? Why get into a row with the Germans as to whether you really left?
It sounds like the only tax at issue is your Australian income, and you should have paid some locally on that? You will not get taxed twice, and in theory
your ONLY income for 2008 will have been the ozzie income and your 2007 bonus.
If it was me, I would calculate what tax would be due if I DECLARED all 2008 income as taxable in Germany (less any tax already paid overseas in Australia).
Might all work out to be a non-event. Unless you took your bonus tax free for 2007 AND paid no tax in Australia?
Have paid no tax at all so far as "technically" self employed. Not actually required to submit a tax return in Oz until April 2009.
Well clearly the tax on earnings will be due either in Australia or in Germany regardless. Even if you don't file in Australia until 2009. Unless you are just trying to dodge paying the tax completely, in which case I dunno why bother posting here 'cos you might as well just come back and not declare the Australian earning anywhere and simply hope you don't get caught.
But sure as eggs is eggs someone is expecting the tax income. If it is due in Oz, and you pay it in Oz, then you won't get double taxed here. If you don't pay it in Oz and declare it as part of your worldwide income as a German resident for the tax year, then you are also not paying it twice.
This is my original point 'cos if it comes down to a toss up between paying the tax in Oz or Germany - there probably isn't much difference at the end of the day (depending of course on the size of the earnings), hence why I am wondering if it ain't easier to declare yourself as German tax resident for the complete year.
Just knowing the Germans I can see you getting into some hairy old discussions if you claim to have been non-resident for exactly 366 days. (or 14 months or whatever). They will still wanna know what you have been doing to prove you 100% were not liable here.
But sure as eggs is eggs someone is expecting the tax income. If it is due in Oz, and you pay it in Oz, then you won't get double taxed here. If you don't pay it in Oz and declare it as part of your worldwide income as a German resident for the tax year, then you are also not paying it twice.
This is my original point 'cos if it comes down to a toss up between paying the tax in Oz or Germany - there probably isn't much difference at the end of the day (depending of course on the size of the earnings), hence why I am wondering if it ain't easier to declare yourself as German tax resident for the complete year.
Just knowing the Germans I can see you getting into some hairy old discussions if you claim to have been non-resident for exactly 366 days. (or 14 months or whatever). They will still wanna know what you have been doing to prove you 100% were not liable here.
Personally, I would opt for contacting the Australian tax authorities, and the Finanzamt (anonymously if possible!), and simply posing the questiong "what if...?"
I had a bit of a tax dilema last year, and both the Finanzamt and the Inland Revenue were surprisingly helpful!!
I had a bit of a tax dilema last year, and both the Finanzamt and the Inland Revenue were surprisingly helpful!!
QUOTE (Johnny English @ Aug 16 2008, 8:09 pm) 
This is my original point 'cos if it comes down to a toss up between paying the tax in Oz or Germany - there probably isn't much difference at the end of the day (depending of course on the size of the earnings), hence why I am wondering if it ain't easier to declare yourself as German tax resident for the complete year.
As I said - I am quite happy to pay the tax (well as happy as one can be) but want to minimise it. I am not talking about a couple of '000 EUR
http://www.expatica.com/de/survival/financ...many--1124.html
So assuming you want to avoid paying any tax in Germany for 2008 (looks like Australian rates will be lower), you need to show them a full return for 2007 and including that deregistration certificate dated before 31/12/2007. Although I still think "coming back" could raise a few questions!!
QUOTE
When German residence is given up and services are no longer performed in Germany, the tax office must be informed and a tax return for the entire calendar year must be filed.
The worldwide non-German source income must be disclosed for tax rate progression purposes. A copy of the deregistration certificate (issued by the local registration office) should be attached to the tax return. A fiscal representative resident in Germany should be appointed to receive the assessment.
Non-recurring payments such as a bonus for German activities should be shifted into the year after departure because the tax burden might be lower.
The worldwide non-German source income must be disclosed for tax rate progression purposes. A copy of the deregistration certificate (issued by the local registration office) should be attached to the tax return. A fiscal representative resident in Germany should be appointed to receive the assessment.
Non-recurring payments such as a bonus for German activities should be shifted into the year after departure because the tax burden might be lower.
So assuming you want to avoid paying any tax in Germany for 2008 (looks like Australian rates will be lower), you need to show them a full return for 2007 and including that deregistration certificate dated before 31/12/2007. Although I still think "coming back" could raise a few questions!!
QUOTE (Johnny English @ Aug 17 2008, 8:58 am)
Although I still think "coming back" could raise a few questions!!
Indeed
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