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Playing US stock market from Germany?

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I'm trying to get a German acuqaintance of mine into investing.

 

It's very simple for her get some US stocks in her name. However, my fear is that the US and German governments might throw tons of opaque and laborious tax paperwork in her way, completely scaring her off. (We're just talking simple buy-and-hold investing here.) Does anybody have any experience with this matter? Does the combined transatlantic taxwork quickly conspire to take you into headache-land?

 

I guess comments from non-German EU citizens would also be greatly helpful...

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i used to own proctor & gamble which traded at frankfurt. i did all my buying etc. through my bank which occured in €'s but it was the u.s. stock which i bought. import is a "freistellungsbetrag" which basically means certain % of wins in a year are tax free.

i no longer do this, am now with a direct broker but i still have a € account and i do everything online (lately not much though). i understand you can sign up for a $ acct, but saw no reason to do this.

anyhow i had to fill out a W2 form b/c of a tax agreement with d-land and u.s.a. had i not done this, i would have not gotten all of my dividends (the germans collect a percentage), but i have not made a big killing so i have not been forced by anyone to pay any taxes on my winnings. incidentally, they sent me the form, i didn't ask for it.

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Thx for the info!

 

"anyhow i had to fill out a W2 form b/c of a tax agreement with d-land and u.s.a."

 

Ah yes, the US W2. Did you have to do any back-and-forth with the US to get a special tax ID number for non-US residents? That's one of the remaining big questions that I didn't directly ask ealier.

 

Also, would you describe the paperwork from the German side as very complex? In your opinion, would an identical German person not owning US stocks have a much easier time filling out a German tax statement?

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no, i didn't need a special tax-id. i will check this again, but by filling out the W2 form, the german gov't couldn't take 30% of the dividend i received, instead they could only take 20% or something like that.

 

as an american, you (I) have to file a u.s. income tax form each year! this year, if you made less than $82,000 then you were basically tax free in the U.S. i haven't filed a german tax form in 2 yrs. which I wouldn't recommend, but the tax-help people did because i had no extra tax to pay and since i had held my P&G stock for over a year, i didn't have to pay any speculation tax on my winnings (which wasn't a lot, but a win).

 

my german collegues/friends have a helluva' time filing german taxes so it makes no difference who you are, it is difficult anyhow you look at it.

 

i haven't done a lot of trading mostly dealt with fonds and since they are long term i don't really do much with them. just beware that if you buy stocks, make a win and sell them within a year of holding them, you have to pay a speculation tax. if you have loses, then you can offset them with the win, but you have to report all this.

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Wow, this thread is almost 10 years old..so, my question..I no longer live in Germany, abmeldung done in Sept 2011..coming to D-Land for a visit, (and more than 6 months after I left..steuerpflicht no longer applies).. I want to trade stocks online from Germany in the U.S. What, if any, are my tax obligations to Germany? No anmeldung..just a holiday..oh, please, 'How will they find out?' is no longer a valid consideration in 2012.

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@ fredberlin

 

if u are just in germany for a visit and trade from one of our U.S. broker u won't have to pay any taxes to germany, since u aren't a resident of germany, so they can't tax ur income. Nowadays u can always trade from everywhere, as long as u have an internet connection. And taxes only apply to the country u are a citizen of, or if u are a resident in another country they will tax u as well.

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