scook17

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About scook17

  • Birthday May 01

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  • Location Munich
  • Nationality British
  • Gender Male
  • Year of birth
  1. Income taxes when you have a company car

    Seems to me that if you are a freelancer, and work from home, a car for business is about break even, and sucks as an employee.   12% personal tax charge on list price, which for most people generate a 50% or so increase in tax paid due to progression. Work it out with a salary calculator, typically 40%+ at least unless you earn nothing. Lots more if you are an employee, as you then add in the social taxes.   MWST is payable on this 12%, but you claim back the MWST on the purchase price. Works out you repay the MWST claimed in year 1 back in about 9 years of ownership.   Depreciation on the vehicle is 6 years, so 16.6% you can claim as a cost of owning the vehicle against income tax. After 6 years, this is zero, as the asset has been written off for tax purposes, but still has a residual value of something like 40% of it's purchase price. When you sell it, for a new one for example, you get a tax charge on this. However, this 16% largely balances out the 12% charge. Seems geared to encourage people to buy a new car each 6 years. Hmm, strange that, this being a car country.   The 12% becomes 6% if you have an electric car, and the cost of fuel is about 1/5th.   As a freelancer, you typically work from home, so there is no distance charge.   So as an employee, you don't get the depreciation claim and neither the MWST refund. But you pay the 12% income increase which costs you some % of the list price. Plus you pay the distance charge. I would rather have a car allowance, and claim 30c per km. Seems to me a bad choice as an employee.   As a freelancer, you offset depreciation against the 12%. You buy an electric car if possible, and then it's 6%.   One thing I struggle with, on the ELSTER form for MWST, is the MWST payable on the 12% entered under  50 Other benefits (§ 13b (2) points 1, 2, 4 to 11 UStG )   Seems to me to be the only place to enter it.   
  2. Claiming expenses before I stop being a freelancer

    I would say, absolutely, if you have not finished your freelance work yet. If you have, its a different answer.   Taxes in Germany are huge, for everyone, even if you earn 30k.. Use a tax calculator. Basically every 2.5k gets you plus 1.25k in income. Its not quite, and gets more as your earn more, but its about this amount. It. Doesnt matter too much your actual tax percentage you pay overall. Progression means most people pay a 50% or there abouts marginal tax rate. Just work it out and see what you pay on that pay rise...   So item for the business., 100 euros, to make that math easy. 19 euros mwst. Leaving 81 * 0.5 (50%) = 40.5 euros. So a 100 euro deduction is funded 59.5 euros by tax deduction, and 40.5 euros from your pocket.
  3. Riester Rente vs. other pension schemes

    Hmm. 27.36 x 12 = 328.32 per year. 10k / 328.32 = 30 years!!!!!   If memory serves me correctly, lets say average life expectancy is 80 years, so 80-67 = 13 years. Did I miss something or did 17 years get lost somewhere? Doesnt seem a good deal to me... Just a plain old savings account, zero fees and 0.01% interest does much better. This is the problem with forcing people to buy annuities....
  4. Riester Rente vs. other pension schemes

    3% to 5%. Wow.   Most people now move to simple index tracker funds in the Uk. Fees are 1% or less. Sites like Hargreaves Lansdown provide fund supermarket style choices. You can passively buy and accumulate, or trade if you wish.   Holding funds like this outside of Germany now is a royal PITA, so I would imagine, as you have to account for taxes on capital gains, even if not sold. Of course this is only provided by German brokers....   I wonder if there is something similar to HL in Germany? Guess someone must provide this.   The tax advantages for a pension for freelancers, basically deferring income to retirement, is attractive, yet the system you need to sign up to seems unattractive. Like the old system in the uk which forced you to buy an annuity. Income drawdown imho, is a much better solution.
  5. Riester Rente vs. other pension schemes

      Perhaps you can share some illustrations for freelancers. Would be useful to see. Also if this is claimable as a tax cost, or are there limits you hit.   1. Freelancer aged 50 as of today. In good health. Non smoker. What is the typical cost of such serious illness cover? Is this an annual cost, which sky rockets once someone becomes ill? Who pays the costs if someone no longer can work? What is defined as 'can no longer can work'? Are pre-existing conditions excluded, and you need medical checks, or is it an insure everyone at the same rate system? Who underwrites this? What happens to the policy when AIG (or this insurer) goes under in the next big crash?   2. Income protection - Sickness/Unemployment. Sounds nice. Does it cover freelance people who natrually move from one contract to another? How long do you need to be sick? A friend of mine went through trying to claim sickness with AOK and she had to wait 6 weeks before getting some percentage of her salary, claimed for 2 weeks, and needed to return to work.   I am not trying to pick holes, but I am curious how it works, what it costs, and how it works for taxes etc.
  6. How to complete a monthly MwSt return using Elster

    Found at least the calculation. https://www.toytowngermany.com/forum/topic/65995-reclaiming-vat-mwst-on-buying-a-company-car/   1% of car value x 80% x 19% MWST rate is additional MWST payable. Just not sure how to enter/add this somewhere on the MWST return. Any advise appreciated. Thanks.
  7. Limit to tax deductions

    Interesting article. Love the monitor example. It can't be used by itself so can not be depreciated to zero in year one. It raises some fun questions:   Supposing the desktop PC, monitor etc cost < 800 Euros, so could be written off in year one. Now after a few years the monitor breaks and they tax payer spend 500 Euros on another one. Does he really have to depreciate that monitor? Are the additional components not wear and tear, kind of like brake pads on a car etc.   Talking of cars, I loved the tires example. Cars typically come with summer tires. You have to buy winter ones. This gets added to the asset value of the car, rather than written on in year one as a service expense? What about that 1% MWST you have to pay on a company car. Is the car now more valueable, given it can have either the summer or winter tires fitted, and you must pay more?   Thanks for the article. Seems a good explaination of how things work.
  8. Climate change

    Interesting what the german govement recently decided to do:   https://www.haufe.de/steuern/gesetzgebung-politik/steuerliche-massnahmen-im-klimapaket_168_500370.html I think, given the 1% monthly rate dropping to 0.5%, and now even 0.25%, this has to give a huge boost to the number of people who will opt for electric cars.   It's a shame they did not promote solar panels. Seems that money is going to big businesses and not to individuals. Why no law saying solar is compulsary in new construction? That a new building is required to generate it's own footprint in terms of it's power consumption. Doesn't have to be solar, but making all building self sufficient would help a lot.   Says nothing about banning Oil burners in new houses (from 2025). Says nothing about the plans to increase the cost of gas to force people to switch, which of course hits those who can least afford to. Would love to see what they did in the UK and insulate for free all homes for people over 65.  
  9. How to complete a monthly MwSt return using Elster

    Thank you for this great guide. Was trying to submit my first MWST return this week, but for stuck on a few points:   1. Line 55/56 - Good vs Services. Do train/plane/hotel trips count as services? Do I really have to count services and goods separately? They are both a 19% deductable. 2. Company car. Not sure which box I enter the 1% tax you have to pay on the purchase price of the vehicle. Perhaps line 52 (other Benefits)? 3. If I get a MWST bill from another EU country, so for example staying in a hotel in Austria, can I claim that back in Germany? I get the impression, I'd have to claim that back in Austria, so file another tax return, which is basically no worth the effort. Is there perhaps some way the German tax office claims this for you, or is that hoping for too much?   Thanks for the help.
  10. Car Allowance - is MwSt included?

    This 1% you refer to is 0.5% this year if you buy an electric car.  
  11. English speaking Steuerberater in Munich

    Am I correct in thinking typical fees charged by a Steuerberater are some percentage of turnover? That this is regulated by law etc?   For example, this seems to be explained here: https://translate.google.com/translate?hl=en&sl=de&u=https://www.gesetze-im-internet.de/stbgebv/__13.html&prev=search   Seems incredibly complicated. Being based on turnover, if you are a freelancer earning 50K from one client or a freelancer earning 100K from one client, then the work is the same, yet the fee doubles? Did I understand that correctly? Is it possible to just agree a fixed fee?
  12. AirBnB : how to declare rental income

      Actually, I found my answer here: https://www.haufe.de/steuern/kanzlei-co/steuerliche-aspekte-der-kurzfristigen-untervermietung_170_207450.html Answer: Yes, all business income is added together, so you exceed 17.5K and must charge 7% MWST in Germany, the same as the hotels do.
  13. AirBnB : how to declare rental income

      I would say it's worse than that. As far as I can work it out, around every 2.5K (I am sure someone knows the exact figure) in income increases the income tax rate by 1% on your TOTAL taxable income. So lets say you paid tax on 50K Euros (after personal allowances). One percent is 500 Euros. If I now earn 52501 Euros, then I get another 2.5K in gross income. However, that 1% addition on 50K is 500 Euros. Lets say the overall rate went from 29% to 30% (I make up the rates, as the actual depends on the figure you earn). That 2.5K increase costs me 30% of the 2.5K (750 Euros) plus an additional 500 Euros on the 50K I was already earning, some 1250 Euros in total. In effect my tax rate for that extra income is 50%.   Equally for deductions, which work in the other direction, a 2.5K deduction can result in a lower tax rate, overall, if it shifts you a 1% tax bracket.
  14. AirBnB : how to declare rental income

    What about MWST? There is a MWST registration threshold of 17.5K Euros, which most people would never exceed, unless they were renting an apartment professionally the whole year in an expensive area. However, as a freelancer I am already registered for MWST from my freelance income. If I rent out a room, should I charge MWST to AirBNB guests, or is the MWST part per income source which generates >17.5K Euros a year?
  15. Future of Germany

      Its an interesting point. I've been looking at buying electric car for a year or so now. You either have the tiny small cars (Nissan Leaf) or the hugely expensive (in the EU) Telsas. No one made a mid market electric car with a decent range. Then the Koreans released the Kia E-Niro ( https://www.kia.com/de/modelle/e-niro/entdecken/#/ ), which basically fills the SUV segment with what I read in the reviews is a decent car. The one I think I may end up buying. An electric car is half the company car tax bill, and costs less than half to run, even if I plug in into the wall and use the expensive electricty from the grid.   Head in the sand doesn't work in a global world. And yes, where are the battery factories in Europe? Where is this technology being developed? I do think Germany dropped the ball here, for those people who want the same car as before, but 'just' with a different (electric) engine. With enviromental regulation artificially aging combusion cars, I will just go straight to zero emissions.