Foreign bank disclosure

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I am a German taxpayer. Is there a threshold amount of money that I may keep in a foreign bank without disclosing it? In the USA there is a $10,000 threshold before a taxpayer is required to file a foreign bank disclosure form. How about Germany? Can I maintain a small account in France?

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Don't worry, the banks within the EU anyway already notify the Finanzamt of accounts held by German residents :)

 

Anyway, to answer your question, you can have as much money as you like in a foreign bank as long as you declare the interest you earn on it in your tax return to the Finanzamt, see post no. 257 in Filing a tax return.

 

If you submit a tax return, there is a small question in the Mantelbogen, on page 4, line 108:

 

  • Unterhalten Sie auf Dauer angelegte Geschäftsbeziehungen zu Finanzinstituten im Ausland?

where they simply ask you whether you have any bank accounts at foreign banks, which you answer either yes or no.

But for EU banks, they will know about them before you submit the tax return, through their own channels ;)

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Yes, you can.

 

The french bank may at some point ask you to give them your german tax number, and if you file a german tax declaration you should mention /make an X on that specific question in the form, that you have such an account.

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thanks...How about if I have an account...a real small one in switzerland...only 2,000 Fr...? Must that be reported?

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You only have to report any interest you earn, not the capital itself.

 

If you submit a tax return, then you are not allowed to lie on it, i.e. then you have to say Ja (indicated by a 1) in line 108 of the Mantelbogen ESt1A, which means that you have a or many bank accounts somewhere outside Germany.

They may then follow up with a letter reminding you that you have to tax in Germany any interest you earn on those foreign bank accounts.

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You only have to report any interest you earn, not the capital itself.

 

Whilst this is currently true it will likely change if Steinbrück & the Greens get in at next election having promised to re-introduce Wealth Tax.

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Reviving this old thread for a similar question.

I have not declared my foreign bank account (In India) so far, since it was mainly used for holiday expenses during my home trips and the interest earned on it was negligible (funds were transferred from my German account for holiday expenses ).

Interest income are taxed at 33% in India and usually total yearly sum was lower then the yearly limit of 1602 € (together with dividend received here in Germany from stocks  ) for last few years.

For the current year, situation is a bit different, as i have made some profits in stocks here and have used up all the free limit of up to 1602 €.

My question is, if i declare the interest income from India for year 2015 and thereby declaring the account, would it lead to any question about not having it declared so far ?

 

Thanks

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Should one deduct transaction costs or bank charges from interest amount before reporting the total interest? 
Say if total interest in a year is 1000 € but bank is charging tax (100 €) on interest and  
it charged (50 €) on multiple transactions during the year. 
Should one then report remaining 850 € to FZ or there is a field in Steuererklärung where one should put those expenses?

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No, you report 1000€.

The transfer fees are lost to you (they are supposed to be covered by the 51€ Werbungskostenpauschale contained in the 801€ Sparerfreibetrag, unlucky for you that you paid more).

You declare the non-German source tax in Anlage KAP line 51: https://www.smartsteuer.de/portal/pdf/ESt2016/Anlage_KAP_2016.pdf

and attach proof for both the interest income amount and the source tax amount.

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Thanks PandaMunich!

Just to be clear I am not talking about transaction costs when moving money from Germany to India but when the money was already in India, local transactions were made and local bank charged fee on that. It doesn't make a difference or?

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Sorry, but no difference.

Any costs incurred for this capital income are supposed to be covered by this 51€ part of the 801€ tax-free amount.

 

Before they introduced that limit, people would buy just one share of a company (preferably a company headquartered in a desirable touristic destination, e.g. Siemens in Munich), and then travel to the annal general shareholder meeting (Hauptversammlung), where they would cast their vote. They would then claim for the travel and hotel costs as costs incurred within their capital income, i.e. basically tax deduct a holiday.

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Hi, can someone help me with a problem I have. When I filled in the income for the previous year, I have declared that I maintain ongoing business relations with financial institutions in foreign countries. I have a bank account in my home country. Now the tax authorities sent me a form in which I am asked to provide more details on this ongoing business. Can someone tell me which kind of details are required?

Thank you! 

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The want to know whether that foreign bank account is related to income that would be taxable in Germany.

For example, if it is an interest bearing account --> you have to tax that interest in Germany.

 

So just explain for what you use that bank account.

For example, if you still have debts in your home country and your monthly debt repayments are paid from that bank account, tell them so.

Or if that was your old bank account and you are just keeping it in case you move back to your home country, tell them so.

 

They are really only after taxable income. So if that bank account has no relationship to income that they can tax, they will not care about it at all.

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Thanks for your answers, indeed that's case. It's an old bank account that I just keep in case I move back to my home county. 

Thing is I get some interest on that account (which is lower than 800 eur), and there's a double taxation agreement between Germany and my country.

Do I need to declare also the interest income from that account?

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Understood. Do I need to fill in AnlageK form now or just a mention of it in the reply paper? 

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