Moving to Germany - calculating monthly costs (taxes, etc)?

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Hi,

 

I am US citizen. My partner is Russian with 10 year old son. We have been living for past couple 3 in Montenegro and are now thinking of moving to Germany. I previously worked in Garmisch prior to moving to Montenegro, and we are specifically thinking about moving to that area.

 

Just trying to figure out details that are very tough to find online. Here are some things we are trying to figure out:

 

1. If I file for residence permit on basis of being retired and self sufficient, my understanding is that I will pay no German tax on my retirement income per US German bilateral tax agreement concerning US retirement income that is paid from US govt. But is there anything else I should be aware of regarding such income?

2. Working online: Say I get residency on basis of being retired but I also wish to work online. For instance teaching music online. Would I need German permission, or could I just do such work and file US taxes (on basis of foreign earned income exclusion) and not even think about German taxes?

3. Working in marketing for local businesses: Say we decided to try and open on online marketing business mainly targeting local clients. Would we have to go through local Arbeitsamt and register such a business, where there would be possible restrictions (such as govt saying that such work can be done by local therefore no need for a foreigner to do it)? Or maybe govt would not allow it period since I got residency on basis of self sufficiency (that is how it would be in Austria)?

4. Social benefits: As I understand, govt pays 196 a month for a child til 18 yrs? Any other benefits to calculate?

5. Medical: Since I have int'l insurance through US govt, and since my partner and son would also be covered (if we marry), would we not have to worry about paying for medical insurance in Germany?

6. Related to 5 above. If we moved on basis of me being self sufficient, would that exclude us from receiving social services like schooling for the 10 year old? Just trying to understand what restrictions residence on basis of self sufficiency entails. That said, note 2 above where we actually do want to pursue work while relying on retirement income at same time.

7. Other: I guess this is what my post was really about in first place - costs. Apart from apartment, food, services, other typical living expenses, do I need to factor anything else in (especially any mandatory govt contributions)?

 

thanks!

 

 

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I might have opened a separate topic for each question....after doing a Search here.

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1 hour ago, lovegermany said:

I am US citizen. My partner is Russian with 10 year old son.

 

1 hour ago, lovegermany said:

1. If I file for residence permit on basis of being retired and self sufficient,

 

There is no residence permit for retired third country nationals in Germany, which makes the rest of your questions moot.

 

48 minutes ago, catjones said:

I might have opened a separate topic for each question...after doing a Search here.

 

I actually don't think it is a good idea to post separate questions because many answers vary depending on the type of residence permit a foreigner holds.

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Maybe a couple other points: I lived 5 years in Germany as active duty military, then worked in Garmisch for 2 years after recently retiring from military and had a work residence permit. I read some posts from a few years ago suggesting that in some cases military retirees obtain residency on basis of their retirement income. If that is not doable,  I also just received a music degree from Berklee College of Music and am planning to make my case at the foreign office in Garmisch that I am planning to be a private music teacher. Also have engineering and international relations degrees but don't want to work on those fields and so don't plan on making employability case based on those skills/education. Maybe if I make a good enough case (hopefully degree from school as reputable as Berklee helps along with summa cum laude honors, but just don't know how all that is viewed) they would view that as grounds for artist/self employed basis. Also, since I have youtube channel and lessons site through which I plan on earning income via online lessons maybe I could declare my online lessons as my self employed work and that I plan on hiring local developer to maintain the site, or hiring local marketing specialist to help with online marketing. Also I plan on registering on various tutor sites with German specified as a language I can teach in. So I don't think this is a weak case. In any case, I think with these sorts of things one has to get creative and work on a good narrative. Maybe a retiree who already has lived 7 years in Germany, who has C1/C2 understanding of the language, who has sufficient retirement income, and music degree is in position to sell music-related work plan to the foreign office?

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2 hours ago, lovegermany said:

I read some posts from a few years ago suggesting that in some cases military retirees obtain residency on basis of their retirement income.

I don't think this is a weak case.

who has C1/C2 understanding of the language, who has sufficient retirement income,

 

Take your ideas to a German immigration lawyer.  Spending even EUR 1.000 on sound advice now will make your planning immensely easier. Immigration law is very complex and not always intuitive.  Often things you do or don't do can have big impacts on your chance of success.  Get the right answer from someone in the know, it will be money well spent.

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Thanks. I suppose my first step is just meet wit the foreign office. They told me today based on what I described that should be doable to obtain residence but of course they need to sit with me and look at details. If that meeting goes well I will probably just submit everything on my own. If I leave that meeting not optimistic then maybe next step is lawyer. 

 

mfg, Brian

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18 hours ago, lovegermany said:

Thanks. I suppose my first step is just meet wit the foreign office. They told me today based on what I described that should be doable to obtain residence but of course they need to sit with me and look at details. If that meeting goes well I will probably just submit everything on my own. If I leave that meeting not optimistic then maybe next step is lawyer. 

 

mfg, Brian

People working at the German foreign office are no specialists in immigration law. Their advice might be wrong.

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I want to talk to them first because based on such a conversation it might be apparent that a path forward is clear or not clear. Lawyers are hit or miss and unless their pay is contingent on them successfully getting a client residence, their effort will likely not be very energetic. With lawyers charging 200 EURO an hour in many cases, paying 1000 EURO to a lawyer gets you not very much and a lot of what they are charging is the providing of their expertise, which because they have worked on many immigration cases means the 200 EURO/hr is partly a scam because they are using an already established knowledge base as opposed to using the 5 hours to really work your case. I think society in general believes that all lawyers, doctors, engineers, etc are equal. In actuality, it is fairly rare that I have had lawyers tell me something that wasn't already known after some basic self research.  Earlier when I was considering Austria, an experienced lawyer wanted 250 EUROS just to tell me if my US govt-provided retirement money was taxable in Austria. Some quick research pulled up the US-Austrian bilateral tax agreement and was immediately clear that my retirement pay would not be taxed in Austria (and obviously the lawyer already knew this but wanted 250 EUROs anyway). So I am not a big fan of giving money to lawyers simply because they ask for it. I too wish I could randomly just receive 250 EUROS for doing nothing. Finding a good lawyer is sort of like finding a good pitcher (talking about baseball now :-) ). It takes a lot of searching. Anyway, plot unfolds... Will post back here on any useful info I obtain.

 

mfg, Brian

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37 minutes ago, lovegermany said:

Lawyers are hit or miss

and

unless their pay is contingent on them successfully getting a client residence, their effort will likely not be very energetic.

 

and a lot of what they are charging is the providing of their expertise, which is partly a scam because they are using an already established knowledge base as opposed to using the 5 hours to really work your case.

 

it is fairly rare that I have had lawyers tell me something that wasn't already known after some basic self research.

 

Earlier an experienced lawyer wanted 250 EUROS just to tell me...  Some quick research [on my own]... and was immediately clear ... (and obviously the lawyer already knew this but wanted 250 EUROs anyway).

I am not a big fan of giving money to lawyers simply because they ask for it.

 

I too wish I could randomly just receive 250 EUROS for doing nothing.

 

Finding a good lawyer is sort of like finding a good pitcher (talking about baseball now :-) ). It takes a lot of searching.

 

 

good grief. res ipsa loquitur

 

you are right that if a lawyer lies to you and says they are doing something for you for 5 hours and they were not, that would be fraud.  But I doubt many lawyers do that.  Apparently you think they do.   In that case, carry on re-inventing the wheel and believing your savvy approach is better than asking someone with expertise in the field.

 

it's sort of like paying a music teacher, the teacher doesn't have to learn how to do anything, they've been practicing for years already and teach based upon established expertise, why pay them?

good luck.

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On 28.5.2019, 15:08:04, lovegermany said:

 

5. Medical: Since I have int'l insurance through US govt, and since my partner and son would also be covered (if we marry), would we not have to worry about paying for medical insurance in Germany?

Won't work.

 

Have you ever been insured by a German health insurance? If not, how old are you?

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The thing is, with teaching, you are always spending that time with the student, looking at strengths/weaknesses, reviewing work, etc. It is like coaching so not sure how you see a parallel with lawyering. It is not the same thing as giving the impression that you are going to research something and charge time specifically for the research even though no research took place. This is why value of manufactured items should go down over time - because you are not spending the same fixed costs to develop from scratch. Now, since most people don't resist unfair costs, you see many industries where people charge certain prices simply because they feel like it and so prices of goods do not do down. Does anyone really believe that each new version of a given smartphone should cost about the same as previous ones? Are the differences so radical that the new phone is truly also worth $600 or whatever? Are there radical new chipsets, new semiconductor technology? So it comes down to choice, gullibility, and personal philosophies. I choose not to pay a lawyer 250 EURO to simply tell me "Yeah, so your US-govt provided retirement pay is not taxable in Austria" because I know he already knows the answer and that it didn't take him/her an hour to figure it out. Now, if I charge someone 30 EURO a hour for a lesson, they are not paying for my already existing knowledge of whatever lesson material there is for that session - they are paying for the act of being taught and interacted with. When the Austria lawyer wanted 250 EURO, was there to be a discussion? No - it was simply his offer to give me an answer about my US govt retirement and how Austria views it from tax perspective. And it is not like a book. Many books cost the same because of overall publishing cost. So I have no problem giving money for something when  I see it makes sense. Like when I moved from Germany to Montenegro and German logistics company wanted 6000 EURO. I said no thanks and then found logistics firm in Montenegro that moved me for 2000 EURO. Some people are just quick to throw money at someone. Anyway, this is more about philosophy than anything else :-)

 

About insurance and age, I am 45, and have been reading that so-called Tricare insurance (used by a lot of retirees) is accepted in Germany. But need to learn more. At least I have German driver's license so something is in place!

 

Anyway, interesting thread and hope to have some useful info to provide after I meet with foreign office.

 

thanks

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21 hours ago, lovegermany said:

teaching is not the same thing as giving the impression that you are going to research something and charge time specifically for the research even though no research took place.

 

 

if a lawyer is billing you by the hour and charges for more time than s/x/he spent or for a task that was not undertaken, then that is fraud and the lawyer can and should be disciplined by the Rechtsanwaltskammer. 

 

When a tradesman does work on your home, you are not just paying for the 45 minutes spent performing the task, but also the related expenses to develop the capability to perform that task and to get to the site with the right materials and tools.  When a lawyer speaks to you on the phone for 45 minutes you are not just paying for chatting with someone for 45 minutes.  if a lawyer charges you EUR 200+ per hour to learn from you what your problem is and answer your question based on that lawyer's expertise with applying the law to your situation (which might include some research to confirm nothing has changed recently), you are getting reliable information (hopefully) and the lawyer deserves compensation for the time and effort taken to (i) develop that expertise and (ii) jump through Germany's hoops to obtain and maintain a law license (which includes 6 years of education and 2 tough tests; as well as a physical office and mandatory malpractice insurance). 

 

if a lawyer charges you a flat rate to provide the advice, you know ahead of time what you are going to pay to get the information you want and can decide if the price is worthwhile. 

 

If you think you can educate yourself better on your own or get the right answer from fellow Toytowners, then more power to you.

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This is an exerpt from the tax treaty between the US and Austria: 

 

ARTICLE 18 Pensions 1. Subject to the provisions of Article 19 (Government Service), a) pensions and other similar remuneration beneficially derived by a resident of a Contracting State in consideration of past employment shall be taxable only in that State, and b) social security payments and other public pensions paid by a Contracting State to an individual who is a resident of the other Contracting State or a citizen of the United States shall be taxable only in the first-mentioned Contracting State.

 

You can find the whole document here:  https://www.irs.gov/businesses/international-businesses/austria-tax-treaty-documents

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20 minutes ago, LeonG said:

tax treaty between the US and Austria: 

ARTICLE 18 Pensions 1. Subject to the provisions of Article 19 (Government Service), a) pensions and other similar remuneration beneficially derived by a resident of a Contracting State in consideration of past employment shall be taxable only in that State, and B) social security payments and other public pensions paid by a Contracting State to an individual who is a resident of the other Contracting State or a citizen of the United States shall be taxable only in the first-mentioned Contracting State.

You can find the whole document here:  https://www.irs.gov/businesses/international-businesses/austria-tax-treaty-documents

 

that's a freaking mouthful.  I'm not sure which state is the "first-mentioned contracting state".  But, irregardless, it seems 19.1 is clearer and resolves OP's issue (as he said), that government pensions are only taxable by the government that pays them:

 

19.1. ...pensions, ... paid from public funds of a Contracting State ... to a citizen of that Contracting State for labor or personal services performed as an employee of that Contracting State ... shall be taxable only by that Contracting State

 

 

but wait, there's more: I can see an argument how after OP has 8 (?) years of legal residency in Germany (if he figures out a way to finagle that) he could use this provision as the basis for holding on to U.S. citizenship if he applies for German citizenship. Namely, loss of U.S. citizenship would be a hardship because of the change of taxation.

 

 

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12 minutes ago, DoubleDTown said:

but wait, there's more: I can see an argument how after OP has 8 (?) years of legal residency in Germany (if he figures out a way to finagle that) he could use this provision as the basis for holding on to U.S. citizenship if he applies for German citizenship. Namely, loss of U.S. citizenship would be a hardship because of the change of taxation.

 

Oops, I forgot it was U.S.-Austria treaty.  One would need to check that U.S.-Germany treaty is same.

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