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Posts posted by StephenGermany

  1. My wife is a teacher in a public school here in Germany. I'm trying to predict what Bruttogehalt will be reported on her Lohnsteuerkarte that she receives a couple months into 2022.

    Silly me, I thought it would be her monthly Gehalt + Jahrssonderzahlung... but it's not.


    When I look at, and put in her specific info, the left hand side looks correct... her Grundgehalt and Jahres-Brutto match what's on her 

    pay stubs. But on the right side of the screen when using the Gehaltsrechner, I see a "steuerpflicht. Brutto" number which is a little higher than her actual monthly Gehalt...

    and a "sozialvers. Brutto" which is even higher. So it looks like there is the actual salary she is paid, the salary from which her income tax is calculated, and the

    salary from which her Rentenversicherung/etc. is calculated from. I tried googling these terms, and got rather confused. Can someone explain the difference?


    For the past 3 years, the number reported on her Lohnsteuerkarte as her "Bruttoarbeitslohn" does not match what the calculator shows as the annual Jahresbrutto,

    or steuerpflicht. Jahresbrutto.




  2. So, the latest chapter is that my customer sent me a printed circuit board I need for development work, which cost almost $6000... which the Zoll guys sat on for quite a while, and ended up asking me to give them a complete list of the ~1000 active and passive components on the board, to likely then ignore, and stick in a drawer somewhere. Anyway, I finally got the board after 10 days or so. And, I just got a bill from DHL for 1000€. The bulk is EUSt., so I can claim it back when I file my next quarterly report. Aside from EUSt., they charged a 39.58 Zölle (ZOLLEU) fee... and a "Zollservice and Zusatzleistungen" + MwSt. I think the latter fee is from DHL for handling customs for me, so the fee is a business expense, and the MwSt. I can claim back. I guess the Zölle fee is also just a business expense? Something else? So the Zoll charges me an import duty, and then a fee for providing me with this valuable service?


    Anyway, did I do this correctly? There is no way to get out of paying the customs fee in the first place, even though they know I am a registered business? I have another one of these boards already on it's way to me. :(


    Thank you!


  3. Thank you. Since I had posted here about this years ago, my first instinct was to re-read what was written here, and then I immediately posted... subsequently, I also googled around... as you said, seems like something you have to do, which may speed things up through customs as compared to a private shipment, but will not affect having to pay the import duty and then claim it back again. Hope you are doing well @Straightpoop!


  4. Really debated whether I should start a new question or add to this thread I started 4 years ago... but here goes...


    So, back to the original post, I did as @PandaMunich suggested (as I always try to do), and got my import duties back

    via my now quarterly VAT filing for the package in question. Some time later, I got another package (these are generally

    electronics boards worth hundreds or thousands of euros). FedEx again pushed me to get an EORI number, so this time

    I did it, and in the meantime, I got the VAT back for the package as I had before.


    Now, I need to receive another package worth big bucks. Now that I have the EORI number, what do I do with it? Do I

    have the sender put it on the shipping label? What does that actually accomplish? Will I not have to pay the tax and

    then file to get it back, because they know it's going to a business, and they won't charge me in the first place? Or is this

    just a legal requirement for businesses importing things, and they will use the number to track everything I receive,

    and I will still be charged, and need to get the money back in my quarterly filing?


    On a related note... technically, these items that are being shipped to me, are the property of my customers. It very well

    may be that I will need to ship them back one day. If I do that, how can I indicate to German/US customs that the

    items came to me from the US, and I am just returning their property? Does that help my customer avoid more customs

    fees or give some other advantage? Should I be doing something differently when the customer sends me something,

    to indicate that I am not taking ownership in the first place? It's unclear however that the customer will want the items



    Thank you!




  5. I'm sorry if I'm being dense. I'm hoping a short example post will clear this up for me.


    A US citizen (but doesn't matter), contributes $80K to an IRA while living in the US over several years. Bobby moves to

    Germany and let's the IRA grow via stock appreciation and dividends. When he retires, in Germany, he takes the money out

    all at once, and it's worth $200K. Are you saying he only needs to pay taxes on $120K of the distribution to Germany?

    Whereas he is taxed on $200K of the money in the US (given he's a citizen, ignoring FTC for now)?


    That's what I tried to say in my first response. That would be great, given tax rates in the US are lower... and given the FTC

    accrual that could be used from past years in the capital gains & passive income buckets to offset the US taxes due.


    Sorry if I still don't get it. =)




  6. Thanks, @Straightpoop. I think I originally read your post incorrectly. I thought you were saying that contributions that were made while living in the US (i.e. nothing to do with Germany) would be Germany tax free for distributions (the principal portion of the distribution) made while living in Germany. That's why my formula made a distinction between contributions made in the US vs Germany. But what you really said, is that if you contributed post-tax money to a retirement account, i.e. taxed by Germany already, then these funds can be taken out tax-free, which of course is logical. But that should apply to funds already taxed by the US as well, right? So for a Roth (let's ignore for now whether Germany recognizes Roth accounts as retirement accounts, or treats them as brokerage accounts, and assume they are retirement accounts), or an IRA that was funded in the US with post-tax money, when distributions are made from that account, Germany would also not tax the portion of the distribution which is principal, if it were previously taxed by the US, right? So it's basically the same in Germany as in the US. When you take money out of a retirement account, you only pay income taxes on the portion of the distribution which was not previously taxed. Right? Of course distributions are always considered to be part principal, part gain/profit, matching the state of the IRA at the time of the distribution. Thank you!


  7. Hi @straightpoop, hope you are well.


    > The next step is figuring out the income taxation of distributions.

    > This will require you to figure out how IRA distributions would be income taxed from your own IRA as opposed to an inherited IRA.


    > According to the most recent  (9 Aug 2018) court decision (FG Köln 11 K 2738/14) which is currently pending on appeal to the German Supreme Financial Court (BFH

    > Bundesfinanzhof, X R 29/18), the general rule will be that a ratable portion of contributions made to the IRA that did not enjoy GERMAN (as opposed to US) tax relief in the year

    > made will be treated as tax-free when distributed in a form other than as a "Leibrente".  (§ 22 Nr. 5 Satz 2 c read in conjunction with § 20 Abs. 1 Nr. 6) 


    So, just so I'm clear... when you say "contributions made to the IRA that did not enjoy German tax relief"... so are you saying that if you contributed pretax dollars to an IRA for 20 years in the US... move to Germany... contribute more while a resident of Germany (with US/German tax relief)... that when the money is distributed for the first time, if you are still a resident of Germany, you calculate how much tax in Germany to pay based on:


    D - contributions while living in Germany, free of US/Germany taxation at the time

    U - contributions while living in the US, free of US/Germany taxation at the time

    T - Total account value when taking first distribution

    G - gain (T - D - U)


    Distribution X ((D+G)/T) = investment income to be taxed in Germany that year?




  8. Hi @Calendar21. Great question... looking forward to hearing the answers. This is of course a complicated topic. I'm not a pro, so hopefully my mini-answers don't get too shredded. =)


    You (US citizen resident in Germany for 11 years) are subject to German inheritance tax. So first you have to deal with the topic of whether Germany will tax the full amount, when you file the German inheritance tax return that you are supposed to file. I suspect the opinion will be yes... assuming of course the amount is high enough to tax, depending on the relationship you had with the deceased. (child, grandchild, etc.)



    In the US, the money is taxed like income when you take it out... all of it, assuming the money invested in the IRA was pretax, which isn't always the case. The US citizen can take the money out (other than RMD's), whenever you want, which doesn't align well with similar German accounts. So that always causes discussion here. You won't pay inheritance tax in the US, unless this is a ridiculously enormous IRA, or the IRA is part of an estate large enough to be taxed. You will not be double taxed for -income- tax, because what you pay the Germans when you take distributions, you get as a FTC on your US return. But since you almost certainly pay the US nothing for inheritance tax, there's no possibility of double taxation with Germany... Germany gets what they ask for. How do you pay Germany the inheritance tax, without taking the money out of the IRA and having to pay income tax on it? Good question. I would think if you don't have other funds to use, you would need to take out enough, so that after German income tax, you can still pay the German inheritance tax. Not fun. Would love to hear I'm wrong on that one.


    Anyway, hopefully this is answered by the pros that you referenced... and I didn't screw up very much. =)


  9. Hi @ansi


    I am not a tax expert.


    401K accounts hold pretax money... both principal and gains. Both are taxable in the US when you take them out of the account, as you know.

    Then as you said, there's the 10% extra hit, since you're too young.


    Since you are tax resident in Germany, yes, Germany considers this income. So it is taxed here. And yes, you should be able to take a tax

    credit on form 1116 of your US tax return based on how much Germany taxed you. And assuming the taxes that Germany made you pay

    are more than what the US would have had you pay, I have no idea whether you can use the extra to cover the 10% penalty... but I doubt it.


    Good luck.


  10. Sorry, you are of course correct... all my "line" numbers were field numbers. I was going by the confirmations they send 

    me after I file each month, and they don't list the line numbers... just the Kz/field numbers.


    OK, just saw your reply while I was writing this. 


    I just played around with the questions that Taxman asks me, to figure out why it put it in the wrong field. When I enter my Einnahme, I set the Umsatzsteuersatz to 0%, and it asks me to pick from a pulldown why. I apparently chose the wrong thing. =(

    I played around with the choices, to get it to put the revenue into field 205. I had to pick "Sonstige im Inland nicht steuerbare Umsätze" to get it to enter the annual income into field 205. Does that sound right to you? I guess as long as it goes into 205, I should not care, since the FA just cares about the forms.


  11. Sorry, just noticed something. On the line that they checked, for "innergemeinschaftliche sonstige Leistungen", next to that it has the law and paragraph, and then it has "Kz. 21 bzw. 721". If I look at box 721 on my Umsatzsteuererklärung, it shows the total amount of revenue I received from my US customers. I guess they are saying that because of that reason, I need to file a ZM?


  12. Thank you very much @PandaMunich.


    I have never issued an invoice to any EU business. I just reviewed all my 2017 Umsatzsteuer-Voranmeldungen. I filled in how much I received each month from my US customers on line 45... I entered how much I paid in VAT for business expenses each month (to get it back) on line 66... and I entered the FedEx EUSt for a couple of the months on line 62 (I think I asked you where to enter this). Everything else was left blank. Based on that, do you see any reason they would say I had "innergemeinschaftliche sonstige Leistungen" in my Umsatzsteuer-Voranmeldungen? If I didn't, then do I really need to file a ZM each year, or not? In any case, I will resubmit the return to fix the Steuernummer error.


    Thank you so much!


  13. This is my first year filing my own taxes in Germany as a Freiberufler. I filed a couple weeks ago via Elster (using Taxman software), and got a letter today from the Bundeszentralamt für Steuern.



    When I registered as a Freiberufler, I was assigned a Steuernummer for Einkommensteuer, and another one for Umsatzsteuer and Gewinnermittlung. Throughout 2017, as I filed my Umsatzsteuer-Vormeldungen, I used the Umsatzsteuer Steuernummer in my Elster filings. So far, so good.


    However, in this letter I received, my two Steuernummern are not shown anywhere. The only number shown starts with DE, which I think is my Umsatzsteuer-Identifikationsnummer. I haven't used that number for anything since I got it, since all my business is with the USA, and I think it's used between businesses in different EU countries.


    Going through the Taxman software again, I realize I made a big mistake. When it asked me about my business, it asked for my "Steuernummer" again... and I entered the wrong one... I entered the Einkommensteuer Steuernummer, when I should have entered the Umsatzsteuer Steuernummer, since it's using that number on my EÜR and other business related forms. I have now corrected that. It also asks me for my Wirtschafts-Identifikationsnummer and my Umsatzsteuer-Identifikationsnummer, both starting with DE, which I had left blank.


    So, in the end, the letter is asking me for my ZM (Zusammenfassenden Meldung)... which I have not yet submitted, because I didn't check the box to do that in Taxman, because I didn't know

    what i was. The letter says that I had "innergemeinschaftliche sonstige Leistungen" in my Umsatzsteuer-Voranmeldungen, and that I therefore need to submit a ZM. I think this is because

    I declared some EU-St in my Voranmeldungen (which I did, for some import taxes I was charged on some FedEx shipments, but under 50€).


    So, in summary:


    1) Is my Wirtschafts-Identifikationsnummer the same as my Umsatzsteuer-Identifikationsnummer?

    2) If not, I'm guessing the number I have is for my Umsatzsteuer-Identifikationsnummer, since that's what the letter is about

    and I had never heard of a Wirtschafts-Identifikationsnummer before. Do I need a Wirtschafts-Identifikationsnummer, to add to my collection of numbers?

    3) Once I make these fixes, I think I can just tell Taxman to resubmit my full tax return, and that should solve the problem?


    Thank you!




  14. I'm a Freibrefler/Selbstständiger and would like some confirmation & help regarding my understanding of expensing

    business purchases on my Steuererklärung. I've broken this post into two parts... the first part is about costs such as

    computer parts... second part is about Nebenkosten.


    All monetary limits in this post are valid for the 2017 tax year... they go up in 2018.


    1) For tech items like USB sticks, cables, etc. that cost under 150€ netto, I'm listing them all under

    Werkzeuge und Kleingeräte in Taxman. I'm also doing that for computer parts that cost under 150€, 
    which I'm a little less sure of, but I'm using Taxman to guide me, and that's what it tells me to do.

    All of these items are fully expensed in the year purchased.


    For items over 410€ netto (of which I have none), it's clear. They need to be expensed over their

    appropriate lifetime in the AfA.


    For items between 150€ and 410€ (netto), I'm uncertain. In the text describing what to do, Taxman

    says that if an item costs less than 410€ netto, I can deduct the full amount. But when I start entering

    those amounts as GWG, if I click the box that says the item cannot be used on its own, like computer RAM,

    I am forced to take the expense over 3 years (the duration I selected from the AfA for computers, which

    I expect to apply to computer parts as well). So that means that even if the CPU in my computer dies,

    and I replace it, I need to spread the expense over 3 years? Or is that a special case? I know that 
    if I build a computer from parts, I'm supposed to view that as having the value of the sum of the parts.

    But in my case, it's more a matter of mixing some new parts with old parts.


    I'm ignoring Sammelposten, since most of my items are expensed over 3 years, and pooling them to

    expense over 5 years would not make sense I think.


    What about something like paying for an online backup service? What kind of cost is that?

    Sonstige Betriebsausgaben? What about a piece of software that costs 20€? That doesn't seem

    to be a Werkzeug or Kleingerät. Sonstige as well?


    I googled around already, and found a lot of conflicting information... lots of sites seem to say that if it costs

    under 410€, you can deduct the whole amount right away, and it doesn't matter what it is. I also found it hard

    to find info on computer parts, and exactly what categories they fall into.

    2) If my home office is 5% of the area of my apartment, I can deduct 5% of my Miete+Nebenkosten+Heizung

    from my business income. And let's say I do that on my 2017 tax return. At the end of this year, I'll get my final

    accounting for 2017 from my Hausverwaltung, showing how much I -really- needed to pay for the heating I

    used in 2017, and how much my portion of the house expenses were. I then am usually given a refund in

    January the following year (2019 in this case). If I didn't have a business, I would simply deduct 20% of what

    I paid for haushaltsnahen Dienstleistungen on my tax return. But since 5% of my Nebenkosten were deductible

    for my business, how should I correctly account for all this? If I get a credit in 2019, do I deduct 5% of that credit

    from my 2018 business related Nebenkosten, to account for having deducted too much in the past? It's also

    confusing that I can deduct 5% of the total Nebenkosten for my business, but I guess then need to subtract 5%

    of the haushaltsnahen Dienstleistungen before taking 20% of that as a deduction, irrespective of my business.


    Can anyone point me to something that explains this, or do so here?


    Thanks very much in advance for any help.




  15. What @PandaMunichsaid sounds correct to me... about being able to file form 1116 to get a foreign tax credit for the taxes paid to Germany, to offset the 30%. It's also likely that your effective tax rate on that income in the year you take a distribution is taxed at a lower rate anyway when you file your US tax return, and you'll end up getting some or all of that money back without the credit. So when you take the money out once you are older than 59 1/2, file a non-resident US return that year, reporting all your US source income. 


  16. My thread above only deals with how US accounts are treated on a German tax return... and they are account types specifically mentioned in the treaty... so perhaps that would shed light on how to handle the reverse case (German accounts on a US tax return) but I have no idea. I am confident that for a normal IRA account in the US, they are only taxed in Germany when money is taken out. The thread also deals with the topic of whether contributions can be deducted from a German tax return for the year they are made. I did that for the first time in 2017, so will find out after I file my German tax return this year. Will update the original thread once I find out.


  17. On the Mietspiegel website, when it asks for the age of the building, it asks for the year of the "Zeitraum der Fertigstellung". If an altbau apartment was

    totally renovated inside (floors, etc., not windows) would the time that occurred be the Zeitraum, or is it still the year the building was built? Thank you!


  18. So if a modernized flat is rented out at a rate higher than the Mietspiegel, are rent increases then not allowed until the Mietspiegel rises enough to allow it? Or can the landlord justify future rent increases above the Mietspiegel, based on those previously made improvements? Thank you.


  19. Quick question... I'm a freelancer, only doing business with the US, so I never charge VAT. So my monthly filings are only to get money back on business related purchases I've made. Anyway, when I started my business, I got an Umsatzsteuer-Identificationsnummer, which I don't use for anything. On Amazon, for example, when I signed up for a business account, they wanted to know this number. I assume that's more for the case in which I would be selling something on Amazon, and they would collect VAT for me (or some other reason that doesn't affect me). My question is whether it makes anything for me easier, if the sites from which I buy things know this number. I still need to enter all these purchases in Elster manually I assume... so in the end, if I never work for an EU business, is this number truly useless to me? Or should I have been using it for something all along? Would be nice if Amazon would be able to report the VAT from those purchases automatically to the Finanzamt, and I'd just get the VAT back automatically. One can dream. Thanks!


  20. Sorry, just making sure I'm clear on this... I have a US house I rent out, which we've owned (and previously lived in) for longer than 10 years. We live in Germany. I had thought its hypothetical sale would not include taxation in Germany (or an increase in tax rate due to Progression). But the reality is that this is only true for countries without a DTA, like the original case in this thread? So even if I could sell the house tax free under US tax law, the profits would still add to my German progression income and bump my tax rate up on my taxable income because of the DTA? Ugh!! Or have I misunderstood?