Tax difference between delegation and local contract

8 posts in this topic

Hello Everyone,

 

I am a US citizen living in the US. My company is German. The company is considering sending me to Berlin for two years with a local contract. The company says international delegations are too expensive. I want to move to Berlin but it concerns me that I will have to quit my job in the US and stop contributing to my 401K and social security. I am trying to convince my company to send me on a "soft delegation" that will mainly include my salary plus a lump sum for relocation and housing. The one area where I have not found a lot of clear information is the taxes. I see estimates on how much I will have to pay but not on how much my company will have to pay for me while in Germany. For example, will the company have to pay for my taxes in Germany or I do? Assuming my total income is the same in both the delegation and local contract, for example US 100K per year, can someone tell me how much my and the company taxes will be in both scenarios (delegation and local contract)? If there is not much difference, I think I can convince them to go with the soft delegation plan. Any help is appreciated. Regards.

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1 hour ago, RedMidge said:

Ask the company accountant? If they have done this before, they should know how it works.

I did and they told me they do not know because that is handled by an external company.

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48 minutes ago, RedMidge said:

Probably because no-one knows the answers to your  issue!

 

Speak for yourself.

 

20 hours ago, Hugo Bo said:

I am trying to convince my company to send me on a "soft delegation" that will mainly include my salary plus a lump sum for relocation and housing. The one area where I have not found a lot of clear information is the taxes. I see estimates on how much I will have to pay but not on how much my company will have to pay for me while in Germany. For example, will the company have to pay for my taxes in Germany or I do? Assuming my total income is the same in both the delegation and local contract, for example US 100K per year, can someone tell me how much my and the company taxes will be in both scenarios (delegation and local contract)? If there is not much difference, I think I can convince them to go with the soft delegation plan. 

 

You are over simplifying the situation. It's not just about taxes. Any proper comparison between an American and German contract not only has to take into account taxes and social security contributions, but also factor in the costs of the minimum benefits required with a German contract and make cost of living allowances. 

 

If you want an accurate answer you should be prepared to pay a professional for the work. 

 

I don't know if she has the time, but @PandaMunich is capable of crunching the numbers.

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4 hours ago, engelchen said:

 

Speak for yourself.

 

 

You are over simplifying the situation. It's not just about taxes. Any proper comparison between an American and German contract not only has to take into account taxes and social security contributions, but also factor in the costs of the minimum benefits required with a German contract and make cost of living allowances. 

 

If you want an accurate answer you should be prepared to pay a professional for the work. 

 

I don't know if she has the time, but @PandaMunich is capable of crunching the numbers.

Hello. Yes, I agree that I am too focused on taxes. I would like to get the full picture but if at least I get the tax information that would be a start. Thank you.

@PandaMunich hello. How can we get in touch? Thanks.

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