Sign in to follow this  
Followers 0

Getting taxed in Germany...on my Australian income

20 posts in this topic

I worked in Germany last year from July to December - half the tax year. The first half of the year was spent working in Australia. When I submitted my taxes, the Finanzamt asked for a record of what I'd earned in Australia. They have now factored that into my income, EVEN THOUGH I have already paid tax on that money in Australia.

I've been lumped with a 1500euro bill, and less than a month to pay it.

 

Has anyone been in this situation before? Have any advice?

0

Share this post


Link to post
Share on other sites

Your Australian income in 2011 did not get taxed again, but it raised the income tax rate you had to pay on your German income, that's normal.

 

This is called progression, for details please see the middle of post no. 580 in Filing a tax return.

3

Share this post


Link to post
Share on other sites

Did that information you sent them include the taxes you paid in australia? If they're factoring in your income, I'm sure you can deduct the taxes, even if it does end up putting you in the progression.

0

Share this post


Link to post
Share on other sites

No, that's not the way it works.

The tax office always deals in gross income, not net income.

 

The way you describe would only work if she had had unlimited taxation in Germany for the whole of 2011 and would therefore would have had to pay Germany income tax on that Australian income.

 

As things are, she had no tax liability at all until she moved here, so she did not have to pay any German income tax on her Australian income, she just gets taxed a bit more on her German income because of her Australian gross income.

0

Share this post


Link to post
Share on other sites

That would mean she took a pay decrease when moving to germany or misrepresented her tax class, because the withholding should cover it in most situations and they wouldn't be asking for 1500 on top, wouldn't it? That's why I find the situation kinda weird.

0

Share this post


Link to post
Share on other sites

@PandaMunich - i know what you're explaining, but to me that sounds like being taxed again on my Australian money. I paid the right amount of tax for the money I earned here, and anything else I earned elsewhere is surely none of their business? Especially if I already paid my taxes on it. I realise I might as well argue with the wind as the German taxation department, and if that's how it is I just have to accept it. But it just really bothers me.

 

@punkinside - I did take a really large pay decrease. Almost 40%. I was really keen to live and work here. Although today...

 

They've given me until the 3rd of September to pay. So a month, give or take. Does anyone know if there's a possibility to spread that out over several payments, or get an extension?

 

If not...who wants to drive the getaway car?

 

Edit: @punkinside - yes, I did let them know about the tax I already paid on it.

0

Share this post


Link to post
Share on other sites

What you can do now is try to retract your tax return application in a letter, but that letter has to reach them within 30 days of the date written on your "Bescheid über Einkommensteuer".

 

Something along these lines (source):

 

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

 

Betreff: <your Steuernummer>

 

Sehr geehrte Damen und Herren,

 

hiermit lege ich gegen den Einkommensteuerbescheid vom <insert date written on that Bescheid> für das Jahr 2011 Einspruch ein.

 

Ich nehme meinen Antrag auf Veranlagung zurück (§ 46 Abs. 2 Nr. 8 EStG) und beantrage die Aussetzung der Vollziehung.

 

Ich war in Deutschland nur ab Juli 2011 unbeschränkt steuerpflichtig, da ich erst dann von Australien nach Deutschland gezogen bin.

Ich habe ab Juli 2011 lediglich Einkünfte aus nichtselbständiger Tätigkeit in Deutschland erzielt, bei denen die Lohnsteuer bereits durch meinen Arbeitgeber einbehalten wurde.

 

Dementsprechend handelte es sich bei meiner Einkommensteuererklärung 2011 um eine Antragsveranlagung, die ich hiermit zurückziehe.

 

Mit freundlichen Grüßen und Dank

<your signature and name>

 

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

7

Share this post


Link to post
Share on other sites

I don't see the problem here. You've been taxed more because before you let them know you earned money in Australia you were in a lower tax bracket here. They put you in the higher one, and you've been done the tax on it.

 

What you should do is file a tax return now in Australia. You say you've been earning a lot less here, but the authorities in Australia have taxed you as if you were going to make the same amount for the whole year. So they now should give you a refund.

 

Also, I hope you went to a professional accountant to do your taxes here. There would have been a whole load of write offs you could have taken advantage of (all your moving costs, flights etc).

1

Share this post


Link to post
Share on other sites

@Hutcho, the tax year in Australia runs from July 1 - June 30. So when I arrived here last July I'd already done a full tax year there. I paid my tax for that full year, and then I left. Case closed in Australia.

 

I did claim flights, makler fees, moving costs etc - every write-off I could here.

 

I never expected I'd be placed in a higher tax bracket, but I realise it's my own fault for not educating myself before the return was filed. I feel like the higher bracket doesn't take into account things like the higher cost of living in Sydney etc etc. It just looks at that money and taxes me as though I'd earned it here. In my mind, I'm being taxed twice on the same money, even though I understand the explanations of how it works.

 

Anyway, I just have to live with it now - lesson learned.

 

I'm trying the retraction thing @PandaMunich has suggested, and then if that doesn't work I've been told I can at least split the debt over several months.

0

Share this post


Link to post
Share on other sites

True about the tax year. I guess that's a bit of a disadvantage you just have to live with.

0

Share this post


Link to post
Share on other sites

"...the German tax authorities exempt tax residents in Germany from paying German taxes on foreign source employment income only if the taxpayer proves that this income—if higher than EUR 10,000—has been taxed in the country where the work was performed.

 

Alternatively, if the resident taxpayer can prove that the foreign country has renounced its right to tax that income, exemption from German tax will also be granted."

 

Rest of the article and the documents that can be produced can be found here.

 

You may read this as well.

0

Share this post


Link to post
Share on other sites

This is kinda off topic but still related. A friend recently mentioned using an australian tax number for freelancing in germany. I didn't think it made any sense as it is the german tax system. But then again when a company outsources a freelance job to a company outside of germany it works. So is it possible to write invoices using an australian tax number for doing freelancing in germany?

0

Share this post


Link to post
Share on other sites

(Since I'm working with international tax law myself) I would suggest you to contact someone specialised in international tax law. There is a tax treaty between Australian and Germany witch should be beneficial for you.

 

http://www.ato.gov.au/businesses/pathway.aspx?pc=001/003/122

0

Share this post


Link to post
Share on other sites

So I thought I would give everyone an update as I got a lot of good advice on here. I had a friend look over everything again, and he was pretty sure that the Finanzamt had made a mistake in one of their calculations. They had my income (even taking into account what I earned in Australia), listed as MUCH higher than it was in one of their tables. One page showed the correct amount, but another page didn't. He wrote a letter in my name asking them to explain the difference.

 

On Thursday last week I got a letter from the finanzamt agreeing that yes, they had made a mistake and put the incorrect figure into their calculation table. I still owe, but only to the tune of 146eu, which I have happily paid.

 

So! It pays to double check. Thanks again everyone, for the advice. Especially PandaMunich.

1

Share this post


Link to post
Share on other sites

So the Finanzamt was trying to screw you, basically. I'm not keen on believing that they just made a "small mistake".

0

Share this post


Link to post
Share on other sites

Maybe it was a template and was populated with the last person's details? I'm not sure. But apparently some of the wording in last week's letter implies that while a mistake seems to have been made, and I need to immediately pay the 146eu, they will continue to investigate the rest of the matter. I kind of took that as a "sleep with one eye open", but I hope its the last I've heard!

0

Share this post


Link to post
Share on other sites

Thanks for the update!

 

However, I would be interested to hear what they said in response to your letter retracting your tax return.

You could end up not even having to pay those 146€...

0

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!


Register a new account

Sign in

Already have an account? Sign in here.


Sign In Now
Sign in to follow this  
Followers 0