I need Help with Tax Calculation

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Hi,

 

I am an Indian moved to Germany this month (may 2011) for a full time job. I understand that in Germany the financial Year is from Jan-Dec which is different in India where the financial year is from Apr-March

 

I am married and have kid. Both my wife and kid are yet to Join me in Germany. They are awaiting for their Visa

 

I want to know how the Tax is being calculated.

 

1. Since my first month of work here in Germany is May 2011, Will I be charged tax for Jan-Apr even though I had been working in India?

2. Will I be considered for Tax bracket III even though my wife and kid are yet to join? (my wife is not working anywhere)

3. I have not got my Tax Card Yet (Lohnsteuerkarten). So how will my tax be?

 

I am curious because this is my first month and I have to start setting up everything here

 

P.S. I am working in Stuttgart area

 

Thanks in advance

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as i understand it, you have the same situation like me which is;

 

- you are steuerklass 1 until they actually arrive and are registered with the Einwohners Amt (first) and then the Finance Amt.

 

once they arrive and you register them per above, you become steuerklass 3 - 1,0 (which makes a big difference to take home pay).

 

p.s. you better make sure your wife brings your original marriage certificate and the original birth certificate/s of your kid/s. - English is ok.

 

cheers

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p.s. as you will be here more than 183 days and it will be your hauptsitz you will be tax on world wide income. I imagine that India would have similar rules to most countries regarding the 183 days, so it is possible you would not have to pay tax there...sounds like int'l tax advisor required.

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Thanks for the clarification

 

I didn't get the world wide income part. I dont get paid in India any more as i moved to germany on a full time work

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Correct, but if you did work in India from the 1st of the year until you arrived, that is part of your worldwide income.

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It will be to your advantage to do a German income tax return for the period January to December 2011 once the year 2011 is over.

 

The thing is, your employer will be deducting income tax from your monthly gross salary as if you had been earning 12 x your_gross_salary. This is done to have a fair tax deduction should somebody change employers during the year.

 

In your case this would mean:

if your German gross salary is: 4,000€ per month

--> The employer will apply the tax rate for a yearly salary of 48,000€ instead of for your real yearly salary from May to December 2011 of 8 x 4,000€ = 32,000€ + your Indian salary.

 

When you do the tax return, you have to declare the Indian income you earned from January to April in a special tax form, the Anlage AUS. The Indian income will not be taxed again, but it will be considered when calculating your final tax rate.

 

*****************************

How to fill in Anlage AUS (bookmark this post so that you find these instructions again in January 2012 when you fill in the tax forms for your income tax return):

 

line 1: your surname

line 2: your first name, mark the box next to "zur Einkommensteuererklärung"

line 3: your German tax number (it will be written on the Lohnsteuerkarte/-bescheinigung)

mark the box to the left of "Stpfl. / Ehemann" (I assume your wife did not earn anything in India in Jan-April 2011, if she did you have to attach an additional form Anlage AUS with her Indian income)

 

line 4, 1st column: Indien

line 5 (I assume you were also an employee in India): Einkünfte aus nichtselbständiger Arbeit

line 6: your Indian gross salary from Jan-April 2011

line 10: the Indian tax you paid on aforementioned Indian gross salary

 

Also attach copies of your Indian salary slips to prove how much your Indian income was.

The above instructions are for the tax form for 2010, the 2011 form will only be released in January 2012, but usually not much changes in them.

*****************************

You can find the rest of the tax forms you need (with step-by-step instructions how to fill them in) in the TT Elster wiki. As an employee, have a look at the section on the yellow background.

 

*****************************

 

You can calculate the difference for yourself with this official progression calculator:

Choose: Splittingtarif (i.e. you're married)

Zu versteuerndes Einkommen in Euro: your German gross income in 2011

Dem Progressionsvorbehalt unterliegende Ersatzleistungen und Einkünfte in Euro: your Indian income in 2011

click on "Einkommensteuer berechnen"

 

Until you get the Lohnsteuerkarte, you will also be taxed to a much more disadvantageous tax class, tax class 6.

 

But don't worry, all of this will be regulated after you submit your income tax return for the year 2011 and you will get all the tax you overpaid back. I think in the income tax return you will also be treated as if your wife had been resident all then time with, if she becomes legally resident in Germany before 31. December 2011, this would be how any resident in Germany would be treated who only got married on 31. December, the tax advantages for being married would apply backwards to the whole year.

In the mean time, you are giving the German state an interest free loan ;)

 

Another thing, you can apply for Kindergeld for your child. This is 184€ per month and everybody working/legally living in Germany gets it. However it doesn't come automatically, in order to get it you have to fill in an application form and send it to your local Stuttgart Familienkasse:

Familienkasse Stuttgart

70146 Stuttgart

 

I'm not sure, but you may be eligible to apply for getting the Kindergeld from May 2011, even though your child doesn't live with you yet. I suggest you ask the people at your Familienkasse.

Here's the application form getting Kindergeld for a child living outside Germany.

 

With your wife not working and you having a child, it will probably make most financial sense for you to stay in public health insurance (where your non-working wife and child are covered free of charge under your insusrance) even if your income permits you to choose private health insurance.

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Wow! thank you PandaMunich for such a detailed reply. Never expected some one to explain me this detail :-) Thank you

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Hi everyone,

 

The response that PandaMunich posted above was extremely useful for me, as I worked in Ecuador for several months this year and the rest of the year here in Germany. However, we were filing all this forms with my boyfriend and with our broken German it is quite complicated. His case is different as he worked in Germany the whole year but he has additional income in the US from an LLC Partnership, for which he pays taxes in the US. Does anyone have an idea how to fill the Anlage AUS form with such information?

 

Thank you!

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If you are not self employed (freelancer), you can go to a Lohnsteuerhilfeverein. This is a non-profit organisation and they do fill out the tax forms online for you. It´s a matter of going there once and then coming back with the papers they wanted. 2 Times 30 Minutes. They charge 180 Euro here, don´t know it this is everywhere the same. In Munich there are lots of these.

 

Just google for Lohnsteuerhilfeverein and the name of your city.

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Hello.

Like several others in here, I happened to live in 2 countries during the last year 2012.

Specifically, I lived in Greece Jan-May 2012 and in Germany June-Dec 2012.

 

During Jan-May 2012 (Greece) I had no income.

During Jun-Dec 2012 (Germany) I was employed by a German company which of course withheld my taxes on my monthly wage. I have been a registered resident of Munich since coming here in June 2012, so I will file my taxes in Germany.

 

My question is: Since I have no income in 2012 earned in Greece, I gather I would not need to fill in the Anlage-AUS form. Will I be asked by the Finanzamt for some proof that I had no Greek income for this period? I am asking because getting any sort of certificate from a Greek authority, much more the Greek tax department, is like marching into hell heavily dressed. And in fact, I do not know if Greek tax authorities issue any certificate like this for people like me (ie. people who have worked as self-employed in the past but never as employees).

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My question is: Since I have no income in 2012 earned in Greece, I gather I would not need to fill in the Anlage-AUS form.

 

No, you wouldn't have needed the Anlage AUS anyway, that is for foreign income you had while you were resident in Germany.

 

You simply fill in 0€ in line 99 of the Mantelbogen ESt 1A.

line 97: vom: 1.6.12 / bis: 31.12.12

 

 

Will I be asked by the Finanzamt for some proof that I had no Greek income for this period?

 

No.

The Finanzamt believes in the good in all people and that nobody would ever lie to them ;)

 

Though it does help that the tax departments and banks within the EU communicate with each other, and if you do lie to them the Finanzamt will find out and then there will be hell to pay...

So people don't even try.

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PandaMunich,

Many thanks for the very prompt clarifications.

 

Your advice throughout this forum is indeed priceless.

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No, you wouldn't have needed the Anlage AUS anyway, that is for foreign income you had while you were resident in Germany.You simply fill in 0€ in line 99 of the Mantelbogen ESt 1A.line 97: vom: 1.6.12 / bis: 31.12.12No.

 

Quick question on this: As a salaried employee, there is no "Line 99" in Mantelbogen as its a simplified version of the form (Actually simplified is wrong because there are many sections (e.g. Werbungskosten) which are missing from the long version). Now in case I moved to Germany during the year and then started a salaried job where can I show the income information before becoming a resident in Germany.

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Solution:

You fill in the 4-page Mantelbogen ESt1A instead of the simpler, 2-page Mantelbogen ESt 1V.

For instructions please see the turquoise section of the TT Elster wiki.

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Solution:You fill in the 4-page Mantelbogen ESt1A instead of the simpler, 2-page Mantelbogen ESt 1V.For instructions please see the turquoise section of the TT Elster wiki.

 

I thought about that too but then found out that the whole section "Werbungskosten stpfl. Person / Ehemann" is missing from the longer form i.e. Mantelbogen Est1A. So do you mean that I do not give the information about Werbungskosten? (I understand that I'm giving the Werbungskosten in Anlage N too but not sure why it is there in the Mantelbogen ESt 1V and not in 1A)

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You give the details for your Werbungskosten in Anlage N, that's enough.

 

Mantelbogen ESt 1V can only be filed by employees with very simple tax situations, the longer Mantelbogen ESt 1A can be used be everybody, regardless of their occupational status.

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No, you wouldn't have needed the Anlage AUS anyway, that is for foreign income you had while you were resident in Germany.

 

You simply fill in 0€ in line 99 of the Mantelbogen ESt 1A.

line 97: vom: 1.6.12 / bis: 31.12.12

 

May be the above information can be updated in the wiki, which has a slightly confusing text about this issue. When I read it, I thought I have to fill A-AUS, if I had any income from outside Germany (even if I was not resident in Germany at the time), and A-N-AUS, in case I was resident in Germany and had outside income.

 

WIKI: "had income from outside Germany you'll need to also fill in Anlage AUS (see here), but Anlage N-AUS (see here) if you had employee income from outside Germany while being resident in Germany."

 

So, from what I gather, A-AUS is not needed in any situation?

 

EDIT:

I got the answer by reading more :) A-AUS is for non-employee income.

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Hi there,

Thanks to this useful info, I know that I need to fill in Anlage AUS for income earned in the UK whilst resident in Germany last year. However, it looks as though they want to know the gross self-employed income earned abroad along with tax deducted. However, because the UK tax year runs from April to April and the period I am talking about is Sep to Dec, I won't know how much tax has been deducted until I come to do my UK tax return for this period at the end of this year. So, should I leave the box blank and risk being taxed by Germany rather than UK (I am returning to the UK) or put in an estimate for tax that will be deducted?

 

Thanks for your help!

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