Residence and Taxes for Self-employed

9 posts in this topic

Hello,

 

My husband has a permanent German visa, the Daueraufenthalt kind that permits you to leave the EU for up to but not equal to 12 months at a time without losing it. He's been manufacturing machine parts in Vietnam and selling them on eBay in Germany, but because of the taxes, costs and living expenses he's only making negative numbers.  He wants to spend more time in Vietnam working on the manufacturing and is considering de-registering from Germany for a period of time each year when he goes to Vietnam to save on the various taxes but continue selling online. Is he allowed to do this and if so is there a rule on the number of months he's allowed to do this for? Is de-registering alone enough to exempt him from paying VAT and income tax for those months or does he need to be gone for a minimum number of months? He would continue to pay for our apartment in Germany, and I will probably be here for a good portion of the year but am still undecided.

 

Thank you.

0

Share this post


Link to post
Share on other sites

First off, are you sure about those 12 months?

As far as I recall, you lose your permanent residency (= Niederlassungserlaubnis) if you stay outside Germany for over 6 months:  https://www.berlin.de/labo/willkommen-in-berlin/aufenthalt/erloeschen-eines-aufenthaltstitels/

 

But that would anyway not help him with the Finanzamt, as long as he has access to an apartment in Germany, he has unlimited tax liability in Germany, with his worldwide income, see §1 (1) Satz 1 EStG:

(1) 1Natürliche Personen, die im Inland einen Wohnsitz oder ihren gewöhnlichen Aufenthalt haben, sind unbeschränkt einkommensteuerpflichtig.

with "Wohnsitz" being defined in §8 AO:

Einen Wohnsitz hat jemand dort, wo er eine Wohnung unter Umständen innehat, die darauf schließen lassen, dass er die Wohnung beibehalten und benutzen wird.

 

 

 

2

Share this post


Link to post
Share on other sites
8 minutes ago, PandaMunich said:

First off, are you sure about those 12 months?

As far as I recall, you lose your permanent residency (= Niederlassungserlaubnis) if you stay outside Germany for over 6 months:  https://www.berlin.de/labo/willkommen-in-berlin/aufenthalt/erloeschen-eines-aufenthaltstitels/

 

 

I believe this explains that it is up to but not equal to 12 months:

https://www.gesetze-im-internet.de/aufenthg_2004/__51.html

 

Quote

(9) Die Erlaubnis zum Daueraufenthalt – EU erlischt nur, wenn

1.
ihre Erteilung wegen Täuschung, Drohung oder Bestechung zurückgenommen wird,
2.
der Ausländer ausgewiesen oder ihm eine Abschiebungsanordnung nach § 58a bekannt gegeben wird,
3.
sich der Ausländer für einen Zeitraum von zwölf aufeinander folgenden Monaten außerhalb des Gebiets aufhält, in dem die Rechtsstellung eines langfristig Aufenthaltsberechtigten erworben werden kann; der Zeitraum beträgt 24 aufeinanderfolgende Monate bei einem Ausländer, der zuvor im Besitz einer Blauen Karte EU war, und bei seinen Familienangehörigen, die zuvor im Besitz einer Aufenthaltserlaubnis nach den §§ 30, 32, 33 oder 36 waren,
4.
sich der Ausländer für einen Zeitraum von sechs Jahren außerhalb des Bundesgebiets aufhält oder
5.
der Ausländer die Rechtsstellung eines langfristig Aufenthaltsberechtigten in einem anderen Mitgliedstaat der Europäischen Union erwirbt.

Auf die in Satz 1 Nr. 3 und 4 genannten Fälle sind die Absätze 2 bis 4 entsprechend anzuwenden.

 

10 minutes ago, PandaMunich said:

But that would anyway not help him with the Finanzamt, as long as he has access to an apartment in Germany, he has unlimited tax liability in Germany, with his worldwide income, see §1 (1) Satz 1 EStG:

(1) 1Natürliche Personen, die im Inland einen Wohnsitz oder ihren gewöhnlichen Aufenthalt haben, sind unbeschränkt einkommensteuerpflichtig.

with "Wohnsitz" being defined in §8 AO:

Einen Wohnsitz hat jemand dort, wo er eine Wohnung unter Umständen innehat, die darauf schließen lassen, dass er die Wohnung beibehalten und benutzen wird.

 

Hmm... but would it then be Ausland-income which merely rises the tax rate on his Inland-income (=0)? Or would it be all counted as Inland-income?

 

If his name was not on my rental contract and would it no longer be considered his apartment or by default of us being married would he still be considered to have access here? And what if we furthermore considered ourselves separated?

 

Or is it by default of his permanent residence card that he would always have unlimited tax liability here even if he was spending much of the year in Vietnam?

0

Share this post


Link to post
Share on other sites

Please state exactly what is written in his passport regarding his residence permit, i.e. the exact "§.. Absatz ... Aufenthaltsgesetz".

Calling @engelchen regarding the visa question.

 

24 minutes ago, MLmunich said:

but would it then be Ausland-income which merely rises the tax rate on his Inland-income (=0)? Or would it be all counted as Inland-income?

 

No, unlimited tax liability (= unbeschränkte Steuerpflicht) means that all his worldwide income has to be taxed in Germany.

 

24 minutes ago, MLmunich said:

If his name was not on my rental contract and would it no longer be considered his apartment or by default of us being married would he still be considered to have access here?

 

Yes, being married to you and not being separated would still mean unlimited tax liability for him in Germany, since he would still have access to your apartment.

Using the "access to a German apartment" rule is how the Finanzamt nabbed Boris Becker:,  https://www.faz.net/aktuell/gesellschaft/steuerhinterziehung-boris-becker-droht-mehrjaehrige-haftstrafe-169298.html

 

24 minutes ago, MLmunich said:

And what if we furthermore considered ourselves separated?

 

Yes, if you separate and he moves away from Germany permanently, he would no longer be taxable here.

But it has to be a real separation, not just him taking care of business for a few months and then spending a few weeks with you in Germany before taking off again, because otherwise the Finanzamt can claim that the centre of his life (= Lebensmittelpunkt) is still in Germany, with you and your child, which means unlimited tax liability in Germany for him.

 

24 minutes ago, MLmunich said:

Or is it by default of his permanent residence card that he would always have unlimited tax liability here even if he was spending much of the year in Vietnam?

 

No, we don't have that definition like the US has for Green Card holders who are considered "US persons" and therefore have to submit US tax returns even if living elsewhere.

1

Share this post


Link to post
Share on other sites
11 minutes ago, PandaMunich said:

Yes, if you separate and he moves away from Germany permanently, he would no longer be taxable here.

But it has to be a real separation, not just him taking care of business for a few months and then spending a few weeks with you in Germany before taking off again, because otherwise the Finanzamt can claim that the centre of his life (= Lebensmittelpunkt) is still in Germany, with you and your child, which means unlimited tax liability in Germany for him.

 

12 minutes ago, PandaMunich said:

No, we don't have that definition like the US has for Green Card holders who are considered "US persons" and therefore have to submit US tax returns even if living elsewhere.

 

Ok, so then if it is legally possible for someone with permanent residency to not have unlimited tax liability in Germany and to retain permanent residency, what would that scenario look like? 

0

Share this post


Link to post
Share on other sites
15 minutes ago, PandaMunich said:

Please state exactly what is written in his passport regarding his residence permit, i.e. the exact "§.. Absatz ... Aufenthaltsgesetz".

 

It's not his passport, but a card, that says: 

 

"Art des Titels: DAUERAUFENTHALT-EU

Anmerkungen: 9A ERWERBSTÄTIGKEIT GESTATTET"

0

Share this post


Link to post
Share on other sites
17 minutes ago, MLmunich said:

Ok, so then if it is legally possible for someone with permanent residency to not have unlimited tax liability in Germany and to retain permanent residency, what would that scenario look like? 

 

It would only work for the first 12(?) months of his absence, i.e. within that period of time, he would either:

  • have to decide to stay away from Germany for good and lose his permanent residency, or
  • to return to Germany and to again tax his worldwide income here.
0

Share this post


Link to post
Share on other sites
12 hours ago, MLmunich said:

Ok, so then if it is legally possible for someone with permanent residency to not have unlimited tax liability in Germany and to retain permanent residency, what would that scenario look like? 

 

He can't have his cake and eat it too.

 

If he doesn't want to be taxed here, he can leave Germany for good. @PandaMunich can explain about the tax implications. 

 

Any type of scam he can come up with to avoid taxation here will eventually lead to his DA-EU becoming void.

 

Theoretically there is a way for him to prevent his NE from becoming void, however, that would require having lived here for more than 15 years AND having sufficient income (which doesn't seem to be the case).

 

 

1

Share this post


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

He can't have his cake and eat it too.

 Unfortunately he isn't trying to have his cake and eat it too, but rather earn enough money to get by and put a little away. The high taxes make it so that he would have to a turnover of 10,000 euros only to save 170 euros every month. At the moment he's just in the negative numbers.

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