How to get German Citizenship and retain (dual) US Citizenship

499 posts in this topic

On 23/02/2021, 19:38:52, Berlinexpatnine said:

Is there someone on the board who already crafted successful language that explains the hardship in regard to an IRA? This would be language that convinced the immigration authorities that renunciation would cause hardship due to IRA problems.

 

 

You keep asking your CPA and people keep posting exactly how you will be hurt by giving up your USA citizenship. No one can inherit your IRA. I am sure you can come up with a worthy American who should be your heir, but now can't. You usually won't be able to invest the money either. Your USA CPA says you are just fine? Find another CPA or download the relevant documents from the IRS Website yourself and submit them.

0

Share this post


Link to post
Share on other sites
10 hours ago, Ben21 said:

Unfortunately nothing to add. I’m also at a total loss and waiting on baited breath to hear something I could use as well. It really seems impossible for Joe Normal with a middle income and under 2mil in assets to craft an argument that would allow you to keep your passport. It’s seriously disheartening...

On 23/02/2021, 19:38:52, Berlinexpatnine said:

Is there someone on the board who already crafted successful language that explains the hardship in regard to an IRA? This would be language that convinced the immigration authorities that renunciation would cause hardship due to IRA problems.

 

 

BTW, I have nowhere near $2 Million (sadly). I have a house in the USA and an IRA - and relatives I wanted to leave them to. Both would pass tax free to my heirs as an American, however as a German they would have been taxed at (I think) 30%.

That sufficed.

1

Share this post


Link to post
Share on other sites
3 hours ago, Jack Schitte said:

 

BTW, I have nowhere near $2 Million (sadly). I have a house in the USA and an IRA - and relatives I wanted to leave them to. Both would pass tax free to my heirs as an American, however as a German they would have been taxed at (I think) 30%.

That sufficed.


That sounds incredibly promising! In my 10 minutes of googling it looks like non citizens’ descendants are taxed at 40% for assets above $60000 owned at the time of death. Now if only I had any descendants.. :)

 

Would probably be a good start for @Berlinexpatnine though!

0

Share this post


Link to post
Share on other sites

Yes, thank you Jack S., I think I can now put together a better argument. The hardship is then that my estate (IRA is the bulk of it) will be taxed at 30% rather than 0% upon death. I have a wife and kids who would lose out.

I would hope that Bezirksamt Pankow would consider events occurring upon my death as also hardship and not say that something bad has to happen to me personally while I am living, but if it worked for you, it might also work for me. 

0

Share this post


Link to post
Share on other sites
23 hours ago, Jack Schitte said:

 

BTW, I have nowhere near $2 Million (sadly). I have a house in the USA and an IRA - and relatives I wanted to leave them to. Both would pass tax free to my heirs as an American, however as a German they would have been taxed at (I think) 30%.

That sufficed.

 

When was your application granted? Did you win a court case or did your local office just decide to accept your arguments? Are you sure it was only based on your heirs' tax liability? 

 

The only recent court decisions I could find specifically exclude potential tax losses of an indeterminate nature in the future. 

 

 

0

Share this post


Link to post
Share on other sites
1 hour ago, engelchen said:

When was your application granted? Did you win a court case or did your local office just decide to accept your arguments? Are you sure it was only based on your heirs' tax liability? 

According to the letter and form our local office sent us, if one asks to retain the other citizenship/s that request is not processed by them because one is requesting an exception.  The determination occurs at a higher level, in Freiburg for us. And it’s the applicant’s responsibility to make the case for what the negative financial consequences of renunciation are.  

0

Share this post


Link to post
Share on other sites
On 2/18/2021, 3:42:22, half-japanese said:

The person handling my case already said that losing the ability to inherit property or land is a "potential" loss at some possible point in the future and does not count. I would have to prove that I would immediately suffer a huge financial loss the day I gave up my citizenship.

 

I'm intrigued about the IRA and inheritance tax arguments. 

 

I don't think that would have been accepted by the Behoerde I worked with in Saxony.  They also were very much focused on the idea that possible problems in the future were not existing unzumutbaren Bedingungen.

0

Share this post


Link to post
Share on other sites

 

6 minutes ago, DoubleDTown said:

They also were very much focused on the idea that possible problems in the future were not existing unzumutbaren Bedingungen.

 

That is exactly what I understand from the cases I've read, which is diametrically opposed to what @Jack Schitte experienced. I'm now curious if Jack's EBH incorrectly granted his application or whether there are successful applicants whose cases I've not found. 

0

Share this post


Link to post
Share on other sites
2 hours ago, DoubleDTown said:

I'm intrigued about the IRA and inheritance tax arguments. 

 

I don't think that would have been accepted by the Behoerde I worked with in Saxony.  They also were very much focused on the idea that possible problems in the future were not existing unzumutbaren Bedingungen.

It’s very black and white if one just considers the tax consequences, leaving inheritance aside.  For certain applicants, the tax deferred accounts are treated as liquidated the day before renunciation and taxed accordingly at a very high rate rather than being taxed as annual withdrawals.  This severely reduces the applicant‘s nest egg.  (An interesting aside is that Germany would receive no tax on the annual withdrawals since the US gets it upon “llquidation“!). 

0

Share this post


Link to post
Share on other sites

 

On 16/03/2021, 08:04:58, Jack Schitte said:

BTW, I have nowhere near $2 Million (sadly). I have a house in the USA and an IRA - and relatives I wanted to leave them to. Both would pass tax free to my heirs as an American, however as a German they would have been taxed at (I think) 30%.

That sufficed.

 

Regarding the property, are you saying that house in the USA belonging to a foreigner is subject to US inheritance tax, but that of a US citizen is not?   

0

Share this post


Link to post
Share on other sites
7 hours ago, snowingagain said:

 

 

Regarding the property, are you saying that house in the USA belonging to a foreigner is subject to US inheritance tax, but that of a US citizen is not?   

9 hours ago, engelchen said:

Yes, That is exactly what I am saying. In death I can leave my house to heirs without taxation, but not if I am a foreigner leaving the house to an American child.

0

Share this post


Link to post
Share on other sites
9 hours ago, engelchen said:

When was your application granted? Did you win a court case or did your local office just decide to accept your arguments? Are you sure it was only based on your heirs' tax liability? 

 

I've been a dual citizen about two or three years. I was initially rejected for dual and filed an appeal. In the appeal I listed dozens of arguments. About 18 months after I filed the appeal, I received word that I won my appeal. They never told me which argument was the winner, but financial arguments tend to be the best.

0

Share this post


Link to post
Share on other sites
1 hour ago, Jack Schitte said:

Yes, That is exactly what I am saying. In death I can leave my house to heirs without taxation, but not if I am a foreigner leaving the house to an American child.

 

That is really weird, but tax can be.  I guess you understand the inheritance tax liability regards your US property, if you are a German tax resident when you die.   It is pretty generous though, if your children or spouse are inheriting.

0

Share this post


Link to post
Share on other sites
On 17/03/2021, 17:40:12, Jack Schitte said:

 

I've been a dual citizen about two or three years. I was initially rejected for dual and filed an appeal. In the appeal I listed dozens of arguments. About 18 months after I filed the appeal, I received word that I won my appeal. They never told me which argument was the winner, but financial arguments tend to be the best.

 

It is unfortunate that you were not told which argument won them over. Based on the case law that I've read, I don't think it could have been the lower tax free allowance for heirs of non-residents as opposed to citizens since your heirs' tax liability is not a hardship for you. 

0

Share this post


Link to post
Share on other sites

It really sounds like it is a matter of pure luck whether any particular argument about IRA or inheritance treatment of non-citizens will be accepted as an argument for hardship -- unless you build up your IRA account or other wealth to over 2 million in advance. Most of us with more moderate means can try this argument but will only win if the people processing the documents happen to be in a good mood that day. 

 

So it's like a lot of things in Germany – if you don't like the answer you are getting, ask someone else, because they are sure to give you a different answer.

 

Since this IRA argument does not seem to be my golden ticket, I guess the real answer is to pick a career/job that will pay me enough that I don't qualify for Hartz 4, but not so much that I can afford the hardship limit of $2350 net in a month. Unfortunately, that doesn't work for me right now, since I have so many dependents that I need to earn quite a bit more than the $2350 net limit to adequately support them, but since the immigration office is not taking all of these expenses into account when they consider my hardship, they just see that I earn more than the $2350 net limit and deny my application for dual citizenship on that basis, and even though I would have to pay $2350 per additional person since they are all applying for German citizenship too, bringing the total up to more than $9000 to renounce citizenship for me and all of them.

 

It is another example of the joke going around the Internet right now:

 

Describe Germany in a sentence:

 

Die Treppe ist gesperrt, weil die Stufen nicht der DIN-Norm entsprechen, allerdings kann sie nicht umgebaut werden, da sie unter Denkmalschutz steht.

 

It seems like my only hope is to restructure the salaries of my business to make my wife the primary breadwinner and me the penniless dependent. Then I will be welcomed with open arms, since of course that makes perfect sense.

 

 

0

Share this post


Link to post
Share on other sites
14 hours ago, Berlinexpatnine said:

It really sounds like it is a matter of pure luck whether any particular argument about IRA or inheritance treatment of non-citizens will be accepted as an argument for hardship -- unless you build up your IRA account or other wealth to over 2 million in advance. Most of us with more moderate means can try this argument but will only win if the people processing the documents happen to be in a good mood that day. 

 

So it's like a lot of things in Germany – if you don't like the answer you are getting, ask someone else, because they are sure to give you a different answer.

 

Since this IRA argument does not seem to be my golden ticket, I guess the real answer is to pick a career/job that will pay me enough that I don't qualify for Hartz 4, but not so much that I can afford the hardship limit of $2350 net in a month. Unfortunately, that doesn't work for me right now, since I have so many dependents that I need to earn quite a bit more than the $2350 net limit to adequately support them, but since the immigration office is not taking all of these expenses into account when they consider my hardship, they just see that I earn more than the $2350 net limit and deny my application for dual citizenship on that basis, and even though I would have to pay $2350 per additional person since they are all applying for German citizenship too, bringing the total up to more than $9000 to renounce citizenship for me and all of them.

 

It is another example of the joke going around the Internet right now:

 

Describe Germany in a sentence:

 

Die Treppe ist gesperrt, weil die Stufen nicht der DIN-Norm entsprechen, allerdings kann sie nicht umgebaut werden, da sie unter Denkmalschutz steht.

 

It seems like my only hope is to restructure the salaries of my business to make my wife the primary breadwinner and me the penniless dependent. Then I will be welcomed with open arms, since of course that makes perfect sense.

 

 

On 3/15/2021, 9:59:24, Ben21 said:

Unfortunately nothing to add. I’m also at a total loss and waiting on baited breath to hear something I could use as well. It really seems impossible for Joe Normal with a middle income and under 2mil in assets to craft an argument that would allow you to keep your passport. It’s seriously disheartening...

 

It's $2,350 *gross* (Brutto), not net. If you're a regular employee, you won't have much wiggle room with your arguments. The wording of the current law is pretty clear on this. If you're self-employed, there may be some flexibility depending on several factors (KSK, GKK and GRV contributions), as I'm trying to argue right now (application still pending, see post from last year). To be honest, arguing anything about your IRA is unlikely to get you anywhere. They are interested only in your immediate financial situation and how it relates to your ability to pay the renunciation fee right now. Also, if you're married, they will probably look at you're total income as a couple. Even if you are a penniless spouse on paper, if your gross income as a couple divided by two still averages out to be more than $2,350/month, they aren't likely to be sympathetic. The number of dependent children you have is definitely your strongest argument. To my knowledge, there isn't any precedent here so I expect they will still deny it on principle unless you still clearly fall below the income limit. That said, I think an appeal has a decent chance (disclaimer: I am NOT a lawyer), assuming you're financial hardship is plausible, i.e. you're not a high earner.

 

Another possibility is simply to wait it out and hope that a future government coalition will shift to the left and change the law. The topic of dual citizenship is revisited periodically in the Bundestag, and depending on the outcome of this "Superwahljahr", something might actually happen on that front in the relatively near future. 

0

Share this post


Link to post
Share on other sites

I would guess that a new German government might also make some other change that could interfere with the possibility of US citizens claiming dual citizenship with Germany. The current loophole seems to have arisen out of pure chance, and perhaps someone on the US side might also lobby for the renunciation fee to lowered for people of normal means -- then the party would be over, and that keeps me up at night. But perhaps the fee could be raised to $10,000 or more. We can only hope.

0

Share this post


Link to post
Share on other sites

Has anybody here that earns way over the limit actually been allowed to keep both citizenships? 

 

I'm at around 4,700€ Brutto per Month. Still many years from being elegible for the german citizenship, but it's important to have these things in the back of the head. 

0

Share this post


Link to post
Share on other sites
On 05/05/2021, 04:31:19, thrall said:

Has anybody here that earns way over the limit actually been allowed to keep both citizenships? 

 

I'm at around 4,700€ Brutto per Month. Still many years from being elegible for the german citizenship, but it's important to have these things in the back of the head. 

 

Yes, people in this group have been successful in obtaining dual citizenship, read through the threads.

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