Taxes on moving to Germany mid-year

Hi,

I just looked at my tax form for 2006 and I'm a bit lost!

I moved to Germany in May 2006. I earnt money in the UK at the beginning of 2006 from January until end March 2006 - I was in full-time employment.

I need to know whether it's necessary to enter this information on my German tax form for this year...? I have been working as self-employed in Germany since the end of August 2006.

Any advice would be much appreciated!

FN

Thanks for the response! So I take it I need to send copies of my payslips from the UK?

Does this mean that the Finanzamt will increase my tax rate based on what I earnt in the UK?

FN

P.S. What can I class as 'relocation costs'? I moved over here voluntarily...

I am having 2nd thoughts on the above.

You did not move to Germany until May 2006. Might be that anything PRIOR to that date is none of their business.

Best take advice from one of the many advertised bean counters here on TT.

Response? what response?

Was me. I wrote and then retracted as did not feel confident my advice was best.

I had the similar situation in 2004. I had worked in England previously and moved to Germany in September.

I submitted my return (with the help of a Tax Consultant) essentially just covering the period from Sept to Dec, and the Finanzamt wrote back and wanted to know how much dosh I got in England between Jan and Sept. I told them, and they said that while it doesn't get taxed again, it does count for something - can't exactly remember what though. I remember feeling I was getting fisted though and thinking they should keep their grubby little hands off my hard earned pounds.

As far as I understood at the time, you can claim back everything for the move as long as you can somehow say that you moved here for work/work prospects.

Germany's tax laws are the most complicated in the world. 2/3 of the world wide tax literature is written for and about German tax system. Therefore and since most Germans do not even start to comprehend what they are doing with their tax forms ---- get yourself professional help. Cost some money but can safe you a lot. There are some people advertising here on TT and at least one of them got excellent ratings from Toytowners.

Cheerio

And few politicians want to change this due to the mass increase in unemployment numbers if they did...

You have to tell them how much your total overseas earnings were in the German tax year (so from January) before you got here. You will not be taxed on the money again, but your tax rate will start higher because of it. There is a sliding scale in Germany for the amount of tax you pay. The first few thousand (around 5000 euros I think) are not taxed at all.. then it starts going up from there. Because you had oversea's earnings before getting here, you will not get this free threshold and will start at whatever tax rate lies at the amount you earned overseas.

Saying this, if you are self employed and you are trying to do your tax yourself, you are simply crazy. You're not only crazy because its very hard to do, you will be throwing away money. There are so many loop holes and write off's you can exploit as a freelancer its not funny. I estimate I was paying half as much tax as a freelancer as I am now as a full time employee.

I used Thomas Zitzelberger for my taxes, and he saved me a lot of money. Speaks perfect English and will be able to deal with your situation without a problem. I know because I was in basically exactly the same situation as you last year.

Get a proffessional to help you.What you earned while having your main accommodation or better said being registred and working in another country has nothing to do with the Geman system.I moved here in a September and got the majority of my taxes abck.

This is simply tax avoidance based on lack of interaction between national tax authorities. Most countries you would work in require disclosure of all earnings in their tax year irrespective of origin. Most countries have reciprocal tax agreements to prevent double taxation so you won't be taxed twice. You SHOULD (are legally required) declare your total earning to both countries during their tax year. Years ago the tax authorities could rarely check back to your previous or future country, so you could get away with partial year declarations and if you timed it right could get almost a full year without payment of tax. That is changing rapidly as cross-country data exchange emerges so is no longer advised unless you like risk-taking, or the numbers are trivial enough that they won't bother to chase.

We did it both ways moving to and leaving Germany and Hutcho is correct the Tax authorities want to now your income before after you lived in Germany so they can calculate it as if you worked the whole time in Germany. You won't pay any extra in taxes but you also won't get a big refund either. Which bring up another point when leaving Germany unless you do your tax form yourself I wouldn't bother paying anyone to do it. We spent 450 euros to get a refund of 451 euros, assuming the finanzamp accepts it as is. They could reject the whole thing and decide we get minimal or nothing back and then were out a good chunk of money.

I moved over here last year & was just wondering when do you need to do a tax return for 2006 by?
Also if i haven't yet registered with the tax office, am i going to have problems? (work for a uk company still)

Simon, If you want to do the tax return yourself, you've missed the deadline in May I think. But if you use a tax adviser you have until the end of 2007 I think.

I am in the same situation and have accepted that using a tax adviser is the best way to go, they don't seem to cost much for what they do ... maybe 200€ or so ... and if you do it yourself you are more likely to get harrased by the finanzamt here ... according to many posts.

I am also pissed off that they want to know all my uk earnings for jan-april 06 ... but it won't get taxed again I hope!

I moved here last year but didnt start working till June, does that mean i will get a refund?

a refund from ? They would probably like to know how you earned your money up until then. If you are a student you are taxed at a different tax rate. Like suggested above get a steuerbrater. There is a good one on Marienstr cnr Prenzlauerallee, Franz and Naether. I have used them since I have been in germany. You could ask them.