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About apel

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  • Location Heidelberg
  • Nationality UK
  1.   The principle is correct, though your quoted tax rates look too high. It depends on circumstances, but I think the basic tax rate would be about 18% on 50k and 28% on 100k.   Solidarity surcharge and church tax (if relevant) would be in addition.   In a specific example, where the taxable income 50,000 euros (tax rate 26 percent) and the revenue from Progressionsvorbehinderung once again 50,000 euros, the tax rate increases according to the tax table to 34 percent, as it is based on a total of 100,000 euros. However, this rate is only applied to the taxable 50,000 euros. However, these are not taxed at the tax rate of 50,000 euros (26%), but at the tax rate of 100,000 euros (34%).       I'm not sure, but I guess this might be in the situation where you leave Germany before living here 6 months. My understanding is that you normally become tax resident on registering.
  2. The 42% and 45% tax rates that you quote are the marginal tax rates at that level of income.   What is relevant to Progressionsvorbehalt are the actual tax rates (as a percentage of income). Because the system is progressive, these are much lower than the marginal rates.   You can use the calculator to find these, or if you search Toytown, you will find a useful graph often posted by PandaMunich which clearly illustrates the difference.
  3. Progressionsvorbehalt is defined by Article 23, paragraph 1 sub-paragraph d of the Germany/UK double taxation agreement, linked in my earlier post. It states simply: Germany, however, retains the right to take into account in the determination of its rate of tax the items of income and capital which are under the provisions of this Convention exempted from German tax. It works like this:   Germany has a progressive tax system - the tax rate increases with the amount of income. If you have say 20000 € of income taxed in the UK and subject to Progressionsvorbehalt, and 30000 € of income taxed in Germany, the percentage tax rate applicable to the German income will be that relevant to an income of 50000 € and not 30000 €.   There's a lot of detail in Toytown - do a search.   With specific regard to Progressionsvorbehalt following a sale of a property, PandaMunich has described details of a relevant court judgement in the thread Moving from UK to Germany in 2019 - tax question    
  4.   That is generally true, but not for everything.   It is all dependent on the double taxation agreement between the two countries, which assigns taxation rights depending on the type of income or profit.   In the case of the Germany/UK agreement, most income is taxed in the country of residence, but for example income or gains from property is taxed in the country where the property is. Various other income is assigned to the UK - it's complicated.   The agreement is here: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/498350/germany_dtc_-_in_force.pdf It's worth reading carefully.   A couple of other points:   As my UK pensions are taxed in the UK (this doesn't apply to all pensions), I get the advantage of the tax-free allowance in both countries.   But I mentioned Progressionsvorbehalt in my earlier post. This results in a higher tax rate on income taxed in Germany in consequence of other income which is taxed in the UK. This can make quite a difference to German tax.
  5. My understanding is:   Under the double taxation agreement between Germany and the UK, for tax residents of Germany, the UK has the taxation rights over capital gains from the sale of property in the UK.   However, as you've resided in the property, you won't be charged UK tax for the gain in respect of that period. Furthermore, if you have ever resided in the property, you won't be charged for the last 18 months of ownership. So, there shouldn't be any UK tax payable if you complete the sale within 18 months of moving.   Although the UK has the right to tax capital gains, there is the possibility that Progressionsvorbehalt might apply in Germany. This would not directly tax the gain, but would take account of the gain in determining the tax rate applicable to your other income taxable in Germany. However, I think that this would not apply in your case, as you resided in the property - possibly subject to conditions.
  6.   If you have state pension entitlements in more than one EU country, you have to claim in the country of the last entitlement. They will then approach the authorities in all the other countries, and each country then has the information to calculate the entitlement in that country.   But each pension is then paid by the country in which it was earned.   After Brexit, the situation may change as far as UK pensions are concerned.   So SusieT has entitlement only in the UK, and must claim it in the UK. Brexit will not change that.
  7. tax on company distributions

    The tax rate applicable to investment income above 801€ is the lower of 25% or your normal income tax rate (plus Soli in both cases), so if you are below the tax threshold anyway, you won't pay any tax.
  8.   Not at all, I found it interesting and useful in that it clarified a couple of things I hadn't realised.   Thanks very much Panda, your input is really helpful.
  9. 1. If you live in the UK, you don't need German health insurance   2. & 3. It's a bit complicated, but from what I understand, the situation is different depending on whether you are insured via KvDR or not. I think the rules are that you can be insured via KvDR if you receive a German state pension and if you contributed to EU health systems for at least 90% of the second half of your working life - there are more details in other threads.   The advantages of insurance via KvDR are that (a) part of your premium is paid by the state pension, and (b) the worldwide income on which premiums are based excludes investment income (though it still includes your UK pension).   To me, (b) doesn't really feel logical, but I am benefiting from it, and it would remove one of your concerns.
  10. I can answer some of the tax questions.   If you're a resident of Germany, Germany will tax your worldwide income, with a few exceptions.   For someone with UK income, the exceptions include the UK state pension, UK occupational pensions (only where contributions were paid for more than 15 years) and income from UK property.    However, income from these exceptions is subject to Progressionsvorbehalt, which increases the tax rate applied to income taxed in Germany to that which would have applied had the UK income been taxable in Germany. So you pay no German tax on this UK income, but more tax on your German income.   If you have income taxable in both countries and live in Germany, you get the benefit of the tax-free allowance on income in both countries - btw, this doesn't apply in respect of German income if you live in the UK. However, I wouldn't be too surprised if the UK tax-free allowance were to be removed for non-residents in the future - there were proposals for this a while ago.   At present, the UK tax-free allowance is much bigger than the German one (except for a married couple with only one income), but the marginal tax rate on income above this level starts off lower in Germany.
  11. First Ever German Dentist Appointment

    Good news that you managed to do it, and that it wasn't too bad. Going to the dentist can be very stressful, but I'm sure you'll feel much better for having done it in the future.    
  12. I'm sure it depends on where you live, and maybe even on the individual official.   I was 64 when I had my initial meeting. I asked if I really needed the B1 certificate, and was clearly told yes.   However, I was fairly relaxed about that, because I was reasonably confident about passing the test (which I duly did).   Anyway, good luck with trying to get an exemption.
  13. Triple nationality permitted?

    If you're married to a German citizen for at least two years, you only need 3 years' continuous residence, so it looks like you are OK on that point.   In any case, as Ireland is in the EU, you can certainly keep Irish citizenship on obtaining German citizenship.   And if you apply for German citizenship before 29 March, there's a chance you could keep the UK citizenship as well. But I'd suggest asking straightaway.
  14. Krankenkasse. Freiwillig- oder Pflichtversichert

      As I stated in my reply above, the advantage of having 35 years' contributions (in total across all EEA countries) is that it allows you to take your German pension at a time of your choosing after age 63, but with a percentage reduction. This then brings forward the further advantage of a lower contribution rate for health insurance relative to freiwillig.   In your case, your German pension is due to start in October, so I guess you could bring that forward to now, if you wish.   If you have pensions from different EEA countries, each country pays its pension separately, but the commencement of payment has to be co-ordinated by the pension service of the last country where you worked. This applies irrespective of whether you have 35 years' contributions in total.   This seems to be an over-complicated system, but I think it's necessary because the amounts of pensions may in some circumstances need to be adjusted as part of the aggregation process. However, in my case, there are no adjustments due to aggregation - I get the German pension based on my German contributions, and I will shortly get my full UK state pension in addition.
  15. Krankenkasse. Freiwillig- oder Pflichtversichert

    A couple of partial answers:   I was freiwillig versichert with AOK, and then became a member of KVdR when my German state pension started. As far as I can tell, two main things changed as a result:   The contribution rate in respect of my German state pension (which is small) roughly halved - I think this is comparable to the employer paying part of the contribution for employees.   The contribution rate in respect of my other income now excluded interest earnings, though it still included my UK pension.   With regard to contributing for 35 years, one advantage is that this allows you to take the pension from age 63 if you wish - but subject to a percentage reduction.