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jeremyjeans posted a topic in FinanceDear TT, I am aware that there is ample previous coverage about contributing to the German state pension (Deutsche Rentenversicherung). But... this mainly covers teachers only. I understand some other professions are also required to contribute. I need the facts answered clearly. I work 98% of the time as a photographic retoucher who works with photoshop, I rarely take photos where I receive money but lets say 2% of my income is through taking pictures. Must photographic retouchers who are self employed freelance workers working for different clients, contribute to the Deutsche Rentenversicherung? Does my profession fall into this category of those who must contribute or not? Does anyone have a current list of the professional occupations which are obliged to contribute? I want to see the facts. As a mid 30's British person who is newly registered in Berlin, DE since 4 months, I am planning my future to potentially stay long term. I heard terrible things about the DRV, its horrendously poor investment value. I do not want to contribute. I also have the dilemma of dealing with Brexit. As a non EU person, will I need to prove I am contributing to the DRV in order to stay if I need a resident permit if Brexit happens? If if if... Or if my profession does not fall into the category which must contribute DRV, is a private pension sufficient for the visa office? Or can I carry on contributing only to my UK pension, would this be enough to retain my residency status at the visa office or must it be a German fund? I heard that if 83.3% of your income is with one client that you must then contribute to the DRV regardless of who you are or what you do as freelance worker. Is this the case? I may be close to the 80% by the end of the tax year, my regular 'main' client is not German, Is there no loophole around this? I worked for about 10 clients this year so far, so I am definitely 'freelance'. But my main source is from the regular client who I do not want to lose. Is there no way I can still legally please the visa office with my contributions but avoid the DRV? I understand the KSK as an option for 'artists'. Is my profession acceptable for the KSK to cover me? If the KSK cannot cover me are there any other options? I heard about this. https://smart-eg.de/en/ If I was covered by either of the 2, would this void me having to contribute to DRV if I work more than 83.3% with one client? I cannot lose my main client. Germany is certainly not the freelancer friendly at all. NOT AT ALL. Is there anymore hidden horrors I should uncover before I decide to settle further? I look forward to hearing your advice on how I should go forward before I am too far 'into' Germany. I may decide to leave the country purely based on potentially having to give approx 19% of my income to a terrible fund. And I cannot lose my clients. Thanks TT p.s - I already fully contribute to a German healthcare fund.
SteveHarris posted a topic in FinanceI'm American, immigrating to Berlin this year to further my career as a filmmaker and visual artist. I make experimental films and sculptures ... definitely "artsy" stuff. My "art" work is serious (I've shown at the Berlinale, museums around the world, etc) but laughable in terms of profit (less than 2500 euro/year). However, I will continue my day job, freelancing as a video editor, mainly for the advertising industry; I report about 50,000euro/year from my advertising work. My hope, over the next few years, is to make more money with my art and spend less time on the advertising. I'm 39, fit, no pre-existing conditions. My plan is to start with long-term travel health insurance (Mawista); it's 58 euro/month but has a 5 year limit. But as year 5 gets closer, as my artistic career hopefully becomes more profitable and I build roots in Germany, I'll apply to KSK. If my art career doesn't work out, I would probably leave Germany. 1) Does my work in the ad industry make me an artist in eyes of KSK? I'm hoping the answer is "no," so I can justify not applying to KSK immediately. I would go from paying 58 euro/month to 740 euro/month (pension plus health); my future in Germany is uncertain, so I'm not especially keen to dump a lot of money into the pension system. The ad stuff is creative, but not really "cultural." On the other hand, I see jobs like Web Designer listed as acceptable to KSK. Are we talking about avant-garde web designers or the guy who works on the Gap website? 2) Back payments ... With the career transition I've described, how will this affect back payments when I get on KSK? Will I have to pay pension and public insurance contributions dating back to my arrival in Germany? Or just back to when I applied for KSK? Can I argue that I was not a professional artist but later became one, whereupon I applied to KSK? A friend has told me that KSK doesn't supply the insurance, just 50% subsidy for buying into a public plan. Therefore, it's not up to KSK whether I have to do the back payments. Regardless, will I have to do back payments, and how much? 3) Complicating matters ... my main collaborator in the artsy stuff is my wife. She does not have a day job. So she could apply to KSK immediately. Or she could get the travel insurance too, and we can apply together in a few years. What are implications for her of applying now vs later? 4) We have a 3-year-old son. If I'm on Mawista travel insurance and she's on KSK, would he be covered through her insurance?
SteveHarris posted a topic in FinanceHoping the illustrious Starshollow or John G. could chime in ... We're moving to Berlin but uncertain about how long we'll stay. Could be a couple years, could be forever. My wife is an EU citizen; I'm American. I'm a creative freelancer and would likely qualify for KSK; income is about 50,000 euro/year. My wife is an artist but doesn't generate significant income yet. We have a 3-year-old child. My wife was not previously on an EU public health plan. I will be freelancing remotely (and exclusively) for my clients in the U.S. All of us are healthy, no pre-existing conditions. Contemplating these two approaches: 1) Get Mawista for the whole family and apply for KSK as soon as possible. What pension and insurance back pay would we be subject to, and going how far back? Would KSK cover half of the back pay? 2) We're not sure about our future in Germany, and pension payments plus cost of public insurance (even with KSK 50% subsidy) are daunting. What would happen if we stayed on Mawista for 4 years, and then (assuming we're still in Germany) apply for KSK. Again, what back pay would we be subject to?
I am an American citizen who will move to Germany in June; I'll live there for at least a year, but probably more. Around that same time, I will be lucky to receive a financial gift from my parents, which I intend to invest. The gift falls within limits of my German gift tax exemption, which we discussed on another thread. I am currently researching how to invest the money to shield it from relatively high German taxes. I intend to buy and hold long-term in a sensible, low-maintenance portfolio; I work full-time and don't need the income. I just want to park the money somewhere and let it grow with low fees, minimal headaches, and of course minimal taxes. Considerations and questions: 1) According to @Starshollow, I should stick to U.S.-based funds; otherwise my tax return in U.S. will be difficult. German 2018 laws make U.S. funds go down smoothly on the German side. However a lot of U.S. investment industry, including Vanguard (which currently manages my IRA), does not want to work with American expats. I do maintain a U.S. mailing address ("virtual mailbox" in Brooklyn) and a NYC phone number, so maybe they won't even know that I am in Germany? Risk of PFIC for US nationals https://www.americansabroad.org/mutual-fund-restrictions/ Vanguard - Special notice to non-U.S. investors Expat Want to Invest in Vanguard 2) How will using a broker or platform based in U.S. versus Germany affect my buy options and tax headaches? 3) I understand that German dividend taxes are higher than in the U.S.; also I don't need the income in near term. So funds that generate maximum growth along with minimal or low dividends would be better, right? What would such funds be, that would work with American expats? (When I do cash out, maybe I'll be back in the U.S.) 4) According to sources highlighted by @PandaMunich ... BMF-Monatsbericht DATEV brochure ... I understand that the German advance tax on "fictive profits" is smaller for non-German open-ended real estate funds (exempting 80% of the profit), versus stock-based funds (exempting 30% of the profit). Does that sound right? If so, are there U.S.-based open-ended real estate funds that also are high growth and no/low dividends ... that also work with American expats?! And is it crazy to put this whole nest egg in one sector, just to avoid German advance taxes? I also read here that there are German "tax traps" in open-ended real estate funds and that they should be avoided; also I should avoid "synthetic products" (not sure what that means): https://mindthegaphub.com/investment-income-taxes-germany/ 5) Given all of the above, where should I put the money? : )