Tax refund for family support abroad

18 posts in this topic

Hi TTers,

 

I have been sending financial support to my mother back in our home country every month.

I was told that you could get a percentage back from what you have sent during your steuererklärung.

 

Now I was given by my steuerberater forms to fill up which had to be signed and stamped by the city hall my mother lived in.

My wife has been doing this for 2 yrs and she says it looked like it didn't bring anything.

 

I would just like to know what your experiences are regarding this matter if you have had any and what requirements were asked from you.

 

Thank you!

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I support my son back home and have done for the last 6 years and I've never got anything back. I was even told by 2 tax advisors that it was not possible.

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A tax return is what you file with the tax authorities. If you get money back, that's a tax refund (or rebate).

 

Sorry, that drives me crazy.

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I have been sending financial support to my mother back in our home country every month.

I was told that you could get a percentage back from what you have sent during your steuererklärung.

 

It is unlikely if she is not resident on Germany (which she isn't) and if she is not totally dependent on you (and not just getting a bit 'on top' to help her out) but there is a provision for tax relief for ‘extraordinary burdens’ from dependents. What the conditions are for 'extraordinary burdens' should be explainable by a tax adviser.

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MrNosey hit the critical point: your mother must be entirely dependent on your support.

 

 

...Dazu gehört der Nachweis der Unterhaltsbedürftigkeit...

(source).

 

This is what you're being asked to verify in the documents from her local authorities. If this is in fact the case, and all transfers are documented (bank/post giro transfers, not Western Union or the like), you can claim her personal exemption or a share thereof (the official schedule is here) on your taxes.

 

Otherwise you are not entitled to any tax relief, merely the satisfaction that you're a good son (or daughter; your profile is not gender-specific).

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2008 we consulted steuerbeamter about financial support to parents live abroad. Because we heard of someone can send money to support foreign parents and deduct the tax. The answers we got were:

1. Every country has their own living cost criteria, this criteria is set by German government, for example I came from Shanghai, almost has one of the highest living cost in entire China, but German government only accept the unified living cost in one country, it means no matter how big difference between shanghai and the rest of poor places in China, we have to share the same standard. So the living cost per person for Chinese is around 188 euro each month by this standard, so my parents can only get maximum 4512 euro per year.

2. Foreign parents have to submit their valid resident card (confirmed by local police office), pension document from related local office.

3. Fill out a document 'Unterhaltserklärung für das Kalendarjahr 20__', there are four pages in this document, including the information about the complete financial property, bank saving, loan, debt,additional income, rent....etc.

After we got this information, we thought we had known all about this process. But the reality was totally others.

1. They did not tell us, if the parents already got some pension from local government, the total amount should be deducted within the living cost criteria. My parents got around 600 euro in total per month, unfortunately this number is already higher the maximum amount of what German government set for China.

2. We sent the 4512 euro in the last month of 2008 by bank with appropriate documentation, but later another steuerbeamter told us we should send in the first month of year, perfectly should be sent by month rather than by year. And the annual amount we had sent in Dec, will be considered maximum as i month.

3. Although the form is in German and Chinese version, but the local police office rejected to confirm any information and sign in the forms from external. I think it make sense to me. So if the steuerbeamter need local resident information to confirm whether or not these two parents are still alive, I have to translate and confirm this Chinese resident card in notaries, double check and confirm by German consulate in shanghai within 6 months, it costs around 100 euro and 1 month time for each year.

 

Finally the steuerbeamter summarized, my parents live in their own house in downtown, very high pension (by criteria of German government), no loan, debt, have health care insurance, even if the banking saving is unsure but he assumes they have some undeclared number. Therefore it was not necessary at all to get extra financial support from Germany. But the truth is, I am the only one kid at home, when I worked in China, I supported my parents 500 Euros each month to cover the high living cost in downtown, and paid all additional medical care cost of my parents when it occurred. Now I moved to Germany and my parents have to starve, it is really ridiculous. House is maybe the valuable property, but it doesn't help the monthly cash flow. The medical cost in Shanghai is pretty high and the partly social health insurance only can offer you the basic treatment and my papa has diabetes and hypertension, my mama has renal problem, and all the extra cost you have to deal with by yourself.

So this was the experience I had, my husband and I continuously sent money to my parents but we had given up these applications. I guess the living cost criteria is much higher in US or UK, but I truly advise you should consult more than one steuerbeamter and try to get the whole picture of this damn process before you start.

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@dengegg- although we all sympathize with anyone who is stymied by an obtuse bureaucratic process, TBH, I don't see why an inability for you and your husband to take what is probably from your perspective a relatively modest tax deduction would prevent you from sending money to your parents that they badly need. I wouldn't let it get in my way if my parents needed financial help from me- I'd send them the money rather than let them worry and/or suffer.

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@Conquistador- just like what I had written above 'my husband and I continuously sent money to my parents but we had given up these applications'. You are absolutely right. My point here is, this policy in terms of financial support to foreign parents is very superficial and unpractical. And the problem is, we didn't recognize that in the first place, because the steuerbeamter gave us inefficient information to let us believe how thoughtful this policy is. But finally it isn't. Compare with the bureaucratic process, this is more annoying for me.

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Thank you all for your responses!

@dengegg - My wife submitted this "Unterhaltserklärung für das Kalendarjahr 20" for 2007 and 2008 but she got nothing.

So I guess I'll just give up with this application. As I see it, it's useless and seems like going nowhere if you really want to prove your case.

 

Again, thank you very much for the information!

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Hello,

I'm working on article about family support and difficulties people face along the way with paperwork.

I also travel a lot and work in near countries and I understand how complicated it can be.

 

Where can I find scanned form for tax refund (for Germany) when they support family back home?

I know that they limit amount of money that will be refunded to taxpayer and I need to analise that tax return form and complications that go with it.

 

I hope that tax refund form can be obtained online as pdf document or something similar?

 

All the Best,

 

Leani

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Please see here:



  • Instructions how to fill in those tax forms in Anlage Unterhalt - if you support parents/spouse.
  • 2013 form Anlage Unterhalt in here
  • form Unterhaltserklärung
  • the legal source for the support can be found in §33a EStG of German income tax law (= Einkommensteuergesetz). In 2014 the Existenzminimum or Grundfreibetrag (= minimum amount the German state considers that a person needs a year to live on) rose to 8,354€, and that is the amount mentioned in the linked 2014 version of the law.
    It is also the amount that remains tax free for a German resident, see §32a EStG, i.e. only income above 8,354€ is taxed. This ties in with the same amount 8,354€ being considered the minimum a person needs to live on in other countries, as long as they are as expensive as Germany, i.e. in country group 1.

 

So, if for example a German tax payer would support a needy parent (if the parent has 8,354€ of his own income back in Greece, that parent isn't needy and cannot be supported) over 65 with 8,354€, then the tax reimbursement the German tax payer would get depends on his personal tax rate.

 

Example:

A German tax payer has a taxable income (= gross income minus health insurance minus a part of public pension contributions) of 50,000€

 

If you put these 50000 into this official income tax calculator, you will get some nice graphs, with the green curve being the average tax rate at 26.97% and the amount in income tax being 13.482,90 Euro.

 

Now, deduct the tax-deductible parent support of 8,354€ from 50,000€, and you have a new taxable income of 41,646€.

Input 41646 into the online calculator, and you will get an average tax rate of 24,17% and an income tax amount of 10.065,75 Euro.

 

--> that German tax payer will get as a tax return the difference, i.e. 3,417.15€ (= 13,482.90€ - 10,065.75€).

 

post-24869-13932335849398.jpg

 

So, how much a certain tax payer gets back depends on his own personal tax rate. A low earner, who anyway only has a low tax rate will not get back a lot, while a high earner who therefore also has a higher tax rate would profit more from supporting his parent:

 

  • If he had been earning 30,000€ taxable income before deducting the support, he would have saved 2,611.13€ (= 5,863.69€ - 3,252,56€) in tax by going from paying 19.55% tax on 30,000€ to paying 15.02% on 21,646€.
  • In the above 50,000€ example, the tax payer saved 3,417.15€ in tax by going from paying 26.97% tax on 50,000€ to paying 24.17% on 41,646€.
  • If he had been earning 100,000€ taxable income before deducting the support, he would have saved 3,701.99€ in tax by going from paying 35.62% tax on 100,000€ to paying 34.83% on 91,646€.

 

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On ‎17‎/‎01‎/‎2010‎ ‎13‎:‎15‎:‎13, El Jeffo said:

MrNosey hit the critical point: your mother must be entirely dependent on your support.

 

 

(source).

 

This is what you're being asked to verify in the documents from her local authorities. If this is in fact the case, and all transfers are documented (bank/post giro transfers, not Western Union or the like), you can claim her personal exemption or a share thereof (the official schedule is here) on your taxes.

 

Otherwise you are not entitled to any tax relief, merely the satisfaction that you're a good son (or daughter; your profile is not gender-specific).

 

Why is "Western Union or the like" not accepted? Western Union transfers are documented. 

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I heard that I can claim for support of only one person in a year? is it true?
can I claim for support of my mother and grandmother who are living in separate hauses?

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1 hour ago, Kristan said:

I heard that I can claim for support of only one person in a year? is it true?

 

You can support any number of needy family member in direct blood line of you and/or your spouse. However, there is a cap on how much total you can claim as tax deductible (and percentage of it depending on the country) per year. You can of course give more, but cannot claim tax deduction.

 

1 hour ago, Kristan said:

can I claim for support of my mother and grandmother who are living in separate hauses?

 

Supporting of grandparents is normally the obligation of the parents. But, it may be allowed when the parents are no more or unable to support them and also depends if your grandparents have other children. So, it is harder and depends on other factors. But there is no harm trying, it may be accepted.

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Hallo. I have job offer from company in Germany. Its not reimbursable to company.  Can my flight ticket added to stuererklaerung? My wife and kids cane later on. Can i add too? 

Thanks

Firza from non EU country

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