How to pay less in taxes and state insurances

Everyone is probably going to laugh at this question,
but is there a way to ummm... get out of paying so much in taxes here?
After income taxes, health insurance, etc. I take home 1750 out of my 3000 Euro salary, which even after what I've heard about German taxes, it seems like I'm getting ripped off.

What annoys me in particular is that 10% is taken for my RV, which I suppose from reading elsewhere on this board sounds about normal. Is there a RV option to pay less into my retirement fund? Yeah, yeah, I know that I'm supposed to save for retirement... but I'm 23 years old and am up to my ears in student loans. And since it doesn't seem like there are any great investment options for my retirement money (if anyone at least had some advice for that, I would be appreciative), I think that money would be much better spent on my student debt.

Okay, that's the end of my sob story...

Also, I read that you can apply to get the money you paid into your RV back 2 years after you leave Germany. Is this true? Do I need to set anything up now to make sure I can successfully apply to get this money back later when/if I leave Germany?

My other thought was that it seems ridiculous to pay into a Arbeitslosenversichurung, since my residence permit in Germany is only valid if I'm working at my current job. That's just another 50 Euros/mo that I'm giving away to the govt. Am I wrong about this? I assume there is no way to get out of this?

I'd appreciate any explanations! Thanks!

You can't get out of either. If you are a non-EU citizen you may be able to recover up to 5 years of payments when you leave (the EU). If you are an EU citizen then you are contributing to a retirement pension in whichever EU state you decide to retire, and you will be able to claim unemployment benefits in other states on the basis if your payments into the German system, so the money is not lost. Your only way to get out of these payments would be to go self employed. So long as you are employed you have no choice but to cough up and enjoy the potential benefits, no matter how you see these otherwise.

A little information in OP's profile would help the suppliers of answers...


Believe me: all contributions are gratefully received by those of us likely to stay...

So if I stay in Germany longer than 5 years and then leave the EU (that could happen since I'm a US citizen), then I won't get anything back from what I pay after year 5?
However, if I stay in Germany longer than 5 years and then move to another EU country (and eventually retire there), everything I pay will just be transferred to the country where I retire.
Did I get that straight?

Correct, except if you leave after 5 years you won't get anything back (but can qualify for a remote but probably small pension in your place of retirement - the unemployment benefits are totally lost)

Some reading material for you:
http://www.deutsche-rentenversicherung.de/...rmany__usa.html
It's long, but it's in English and it's well-written and organized.

You can't get ANY of your contributions back after you've paid contributions for 60 months.
You would be eligible for a German pension.

If I leave Germany having paid X years pension contributions, would I receive the same amount in the new country as I would have received in Germany?

Depends where you go to
AFAIK if you go to another EU country your X years in Germany will be treated as having paid X years into your later country-of-residence scheme. Whether that would yield more or less that if you had stayed here is open to conjecture.

I think you would end up still getting paid by Germany based on your German contributions, but your years of contributing would be combined to establish eligibility. It seems sort of complicated.
See here: http://www.deutsche-rentenversicherung.de/...rking_in_europe

Related discussion:
German state pensions

No, I've been going through the mill on this one for the last couple of years. What you get is a German pension based on your X years of contributions in Germany and a British pension based on your Y years of contributions in the UK. Your British pension will be paid in GBP, but can be paid in Germany (or anywhere else for that matter!). Similarly, your German pension will be in Euros and can also be paid more or less anywhere with a functionong banking system - i.e not in Iraq, at present!

In addition, in the UK you can make additional payments to make up for missing contribution years (up to six years after the contributions were due, which is usually two years after the tax year concerned). If you reach pension age after April 6th 2010, the qualify years drop from the current level of 44 years to 30 years - just my luck that I turn 65 on 30. March 2010 - seven days too early!

If you can afford to put off taking up your UK pension, it's worth knowing that your pension increases by a bit over 10% for each year you delay taking up the pension. In Germany it only increases by a piddly 1.5%, i.e. less than inflation!

sorry OP..
hmmm..so if it's only 30 years now, if I work in Germany from now on then I only need to make a few missing contribution payments for the next 5 years or so in order to get full (whatever that means!) UK state pension...that's a stroke of good news.

since I'll probably be self employed or director of my own company here then I'll be trying all i can to minimise the tax burden here.

so far though I can't figure out a way to get close to the deal in the UK though:
corporation tax at 21% (I have my own Ltd company) - of course after a healthy grand or so 'expenses' each month
taking small zero tax rated salary that gives you NI stamp
un-taxed (bar the initial corporation tax) dividends up to the 40% band.
take balance of company money by closing it and getting entrpreneur's tax (spelling!) relief (works out about 10%)

Interesting about the 10% increase on pension value...that's quite a lot if you think you're going to live long and don't need the bucks straight away.

Full UK state pension is currently circa GBP 4.5 K. for a single person.
Index linked to UK prices if you are a pensioner in the EU
and a few other countries.
Not enough to live on, but a useful supplement.
My advice is to go back to the UK to claim it rather
than get involved with the interminable German bureaucracy.

No need to go back to the UK, you just need to write them in Newcastle (makes life easier if you can still remember your Social Security number, which I couldn't ). They're very helpful and surprisingly efficient - reply on Jan. 8th to a letter written on Dec. 23rd!

German bureaucracy, fortunately, doesn't have anything to do with your UK pension.