Moving away from Germany to Portugal. Abmeldung.

25 posts in this topic

6 minutes ago, MikeMelga said:

Ah, ok, then rules changed since I moved in, that clarifies the different understanding I had with Panda.

But this is weird. I do have permanent homes in Germany and Portugal. If I move to Portugal while working remotely for a German company, where am I taxed?

 

I believe in this case one shall read a beautifully laconic 97-page document

https://www.bundesfinanzministerium.de/Content/DE/Downloads/BMF_Schreiben/Internationales_Steuerrecht/Allgemeine_Informationen/2018-05-03-steuerliche-behandlung-arbeitslohn-doppelbesteuerungsabkommen.pdf?__blob=publicationFile&v=3

 

IMO, it's ridiculous how people tend to overcomplicate the things:) as if boring people have invented the set of measures to make everyone's life equally boring :D

 

To answer your question: I'd say that tax from employment will be going to German FA, while rest of world-wide income associated tax - to Portugal. 

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16 hours ago, Martin Wasser said:

Can deregistration be done by post?

I don´t know for sure but my guess is that you can. They can hardly expect you to fly all the way back from say Australia just for deregistration in case you decided to move there while on holiday.

 

16 hours ago, Martin Wasser said:

And do they require to attach a new address for their database? 

No. It´s enough to say "other country".

 

16 hours ago, Martin Wasser said:

While moving away I guess you still had a few months of work performed in Germany during the transition year

To avoid any questions about that I moved on 1 Jan and on arrival I asked the border police officer to stamp my passport so I had proof of the date of arrival. I had already been retired anyway. To my surprise my accountant never asked for the exact date I left Germany so I guess the Finanzamt doesn´t ask for it on their forms for persons subject to limited tax liability.

 

7 hours ago, Martin Wasser said:

The old formal rules (number of days) have been substituted in 2017 by different definition logic.

https://home.kpmg/xx/en/home/insights/2017/07/flash-alert-2017-123.html

Has that been implemented? The link is merely for a draft.

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On 3/23/2021, 11:41:09, PandaMunich said:

 

You don't say - a whole year ;)

 

Well, in that case you will have no problem understanding the double taxation agreement (DTA) between Germany and Portugal and then this lovely brief 97 page document about just article 15 of the DTA, i.e. about the "Steu­er­li­che Be­hand­lung des Ar­beits­lohns nach den Dop­pel­be­steue­rungs­ab­kom­men" = "Tax treatment of wages under double taxation agreements": https://www.bundesfinanzministerium.de/Content/DE/Downloads/BMF_Schreiben/Internationales_Steuerrecht/Allgemeine_Informationen/2018-05-03-steuerliche-behandlung-arbeitslohn-doppelbesteuerungsabkommen.pdf

 

I am an engineer and a Steuerberaterin, you are just an engineer. 

You mean well, but I can't in good faith let you mislead the OP or the next reader who comes along.

 

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

 

The OP will have unlimited tax liability in Germany until the day he moves away, and limited tax liability with his German rental income after that.

From the date he moves to Portugal with the intention to stay, he will have unlimited tax liability in Portugal, i.e. will get tax residency there.

This is called split-year treatment.

 

If he keeps a flat available to him in Germany, Germany can question whether he really moved his "Mittelpunkt der Lebensinteressen" (=centre of vital interests) to Portugal, especially since he is not married to his Portuguese girlfriend and this would mean that his tax residency in Germany would not end with his move.

But let's assume he does this properly and gives up that flat and only keeps flats in German that are not available to him, i.e. which are rented out.

Then we have a simple case of split-year treatment, as explained above.

 

So no, this is not about June/July.

No, he will not get back the German tax on his salary if he moves by June, since Germany has the taxation rights on his pre-move salary.

And no, he does owe Portuguese income tax on his post-move salary that he gets from his German employer, since with his new tax residency being in Portugal, he doesn't fall under the exception rule of article 15 (2) of the double taxation agreement (DTA) between Germany and Portugal, instead he falls under the standard rule of article 15 (1) of the DTA. Which states lthat Portugal as his state of residence gets to tax his post-move salary. Only for those days after his move, on which he returns to Germany on business trips and works while physically in Germany, does the tax taxation right get taken away from Portugal again and given to Germany.

 

Taxation of his capital income (interest, dividends, profit from selling stocks/funds/bonds/options, and so on) also goes by where he is resident as defined in article 4 of the DTA.

So until he moves away from Germany, Germany has the taxation rights on his worldwide capital income earned until the moving date, i.e. on his pre-move capital income.

Portugal has the taxation rights on his post-move worldwide capital income, i.e. on the capital income he earned starting with the moving date.

He should of course tell all his worldwide banks his new Portuguese address when he moves, so that they know his tax residency moved from Germany to Portugal and so that, for example, his German bank knows to no longer to deduct Abgeltungsteuer and Solidaritätszuschlag.

Banks in over 100 countries have to inform the tax department of his country of residence about the capital income he had: https://www.toytowngermany.com/forum/topic/361434-taxation-of-currency-transactions/?do=findComment&comment=3477275

 

He will always have to tax his German rental income in a German tax return.

 

I've heard from a friend's lawyer today that while moving from Germany to Portugal on would apply to NHR (20% flat tax rate on Portuguese income, and 0% on foreign income) one can be qualified under Erweiterte unbeschraenkte Steuerpflicht nach Par. 2 AStG - since 20% will be just slightly lower than 2/3 of the taxes from 77.000 euro single person. That is made to avoid Germany losing tax money from people moving to 'tax heavens', and can lead to dreadful consequences. 

 

It's normally applied to real tax heavens like UAE or Bahamas, and Portugal is not naturally triggering this red flag, but it could.. 

 

Anyone have dealt with that during their move? 

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6 hours ago, Martin Wasser said:

I've heard from a friend's lawyer today that while moving from Germany to Portugal on would apply to NHR (20% flat tax rate on Portuguese income, and 0% on foreign income) one can be qualified under Erweiterte unbeschraenkte Steuerpflicht nach Par. 2 AStG - since 20% will be just slightly lower than 2/3 of the taxes from 77.000 euro single person. That is made to avoid Germany losing tax money from people moving to 'tax heavens', and can lead to dreadful consequences. 

 

It's normally applied to real tax heavens like UAE or Bahamas, and Portugal is not naturally triggering this red flag, but it could.. 

 

Anyone have dealt with that during their move? 

 

This only applies if:

  1. you're German (you are) and
  2. you will keep considerable economic interests in Germany (I assume you won't be doing that)

see here: https://ouszosdti7rmea5lo3vqbauv7i-adwhj77lcyoafdy-www-haufe-de.translate.goog/finance/haufe-finance-office-premium/unbeschraenkte-und-beschraenkte-steuerpflicht-25-erweiterte-beschraenkte-steuerpflicht-nach-astg_idesk_PI20354_HI2173437.html

 

So I don't see §2 AStG being a problem for you, just read it for yourself: https://www.gesetze-im-internet.de/astg/__2.html

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