Have accepted a permie job in Munich...

[LostInBrussels]

I rent out my property in the UK and I was wondering if I will have to pay German tax on rents received. I already pay British tax, I just really would prefer not to have to submit German tax returns, as my taxes from now on should be PAYE.

Any advice would be appreciated.

[centurian]

As a general rule, when you are resident in a country, you have to pay local taxes (i.e. in your country of residence) on all your worldwide income - minus any tax you're already paid to the country where the worldwide income was earned.

So if you pay UK tax on your UK rental, then the tax already paid will be taken into account. You might end up paying nothing extra - but if tax rates are higher in Germany, you may have to make up the difference.

However, that's just an overview. For confirmation, you will need to speak to an expert on German tax law.

[Olly]

...don't forget interest on your UK accounts, share dividends etc.
From what I understand this dual taxation lark doesn't work perfectly either.

But yes...worldwide income....unlike a member of Quay advised!!
Also be advised that by a lot of measures control of your ltd may have moved to DE...nice!!

[LostInBrussels]

Gotcha.

Lots more paperwork to look forward to

[SalsaFever]

When you filing out German tax, don't forget to include your income from previous country you worked for the same tax year.

Famt is googling internet profiles to find out if you worked somewhere else during the tax year.

I know some people arrived in Germany at the middle of the year and declared themselves as on-the-bench for the first half.

Once they busted because of AFSS / PSB scam, famt also brought 'undeclared income from previous employment' issue on the table, as an appetizer

[Olly]

When you filing out German tax, don't forget to include your income from previous country you worked for the same tax year.

Famt is googling internet profiles to find out if you worked somewhere else during the tax year.

I know some people arrived in Germany at the middle of the year and declared themselves as on-the-bench for the first half.

Once they busted because of AFSS / PSB scam, famt also brought 'undeclared income from previous employment' issue on the table, as an appetizer

German tax yr runs from Jan though doesn't it?
Who would you be paying tax to if you worked as Ltd contractor in UK in 09 and as PAYE standard employee in DE from Jan on???
Anyone know?
Anyone care to provide misinformed speculation ?
Ta Olly

[BlasterBates]

No in Germany as it so happens rental income from abroad is not taxable. Due to naughty Germans offsetting losses from foreign property against German income in the past.

If it's your own home you're quids in.

If you're rental income is a business, it remains taxable anyway in the UK, from what I understand.

See a tax advisor anyway. I had one and that's what he advised me.

[BlasterBates]

German tax yr runs from Jan though doesn't it?
Who would you be paying tax to if you worked as Ltd contractor in UK in 09 and as PAYE standard employee in DE from Jan on???
Anyone know?
Anyone care to provide misinformed speculation ?
Ta Olly

You must declare any income that you have, since you registered in Germany, except foreign rental income, coz it aint taxable.

Your didvidends certainly will be taxable, you need the approriate form for your didvidends. though they will deduct UK tax from this. Corporate income from your Ltd is exempt doesn't need to be declared as this is a UK entity. Your salary will have to be declared, and put in the box which is exempt accoridng to the DTA. A PAYE slip will suffice. This won't be taxed but will push up your tax rate on other income.

If you arrive sometime in the middle of the tax year, you only declare income that you received after you arrived in Germany. So best to make sure all your salary and dividends are paid out before you register. You'll be in the fortunate position of having a low tax rate if the tax year only has a few months to run.

Your UK income will be taxed in the UK as you were resident for part of the year, but you might be on a lower tax rate.

[Olly]

Your didvidends certainly will be taxable, you need the approriate form for your didvidends. though they will deduct UK tax from this. Corporate income from your Ltd is exempt doesn't need to be declared as this is a UK entity.

I don't pay further tax on my dividends because keep them under the 36Kish total income limit. I'm guessing those dividends must stop when I'm in DE or I'll pay tax on them?

If you arrive sometime in the middle of the tax year, you only declare income that you received after you arrived in Germany. So best to make sure all your salary and dividends are paid out before you register.

ERm....so I can have ALL my UK allowances even though I didn't complete a full UK tax yr and Mr German tax man can't include them in their calcs?
Sounds mighty generous

[SalsaFever]

If you arrive sometime in the middle of the tax year, you only declare income that you received after you arrived in Germany.

Hey Blaster,

You are wrong this time.

In Germany, you have to declare your world wide income. You have to declare whatever income you receive before you came to Germany and after you left the Germany if it falls into the same tax year.

The point is you won't be taxed for the income sourced outside of Germany, but it will change your tax rate according the progression clause in German tax law.

So let say, you did 6 month contract in Belgium then moved to Germany within same tax year, you have to declare your Belgium income to f-amt which will likely increase your tax rate.

Same principle applies, if you work in Germany, then moved to Belgium, then you have to declare Belgium income in your German tax papers.

In both cases, your outside income won't be taxed, but your tax rate will be calculated according to your worldwide income.