germany tax system.pptx

7/23/2019 Germany Tax System.pptx

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TAX RU LE IN G ERM AN Y

Member of group:Stefanus 32413123

Monica 32413183Virginia Olivia 32413204Tirta Elisabeth 32413222


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Germ any Tax System

In Germany, taxes are levied by thefederal, state and local governments.

The main taxes payable in Germany are

income tax on every employees income

corporations tax

trade tax on income

value added tax (GST,

inheritance!gift tax and

real estate tax.


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The main sources of German tax la"are : Income Tax #ct, $orporations Tax#ct, %alue #dded Tax #ct and Inheritance

and Gift Tax #ct. &ver and above these taxes, the German

federal ministry of 'nance issuesguidelines and decrees. certain leviesmust be paid, for example :for healthinsurance, unemployment insurance andsuperannuation. In addition,


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esident

erman ta! la" bet"een resi#ents oferman$ an# non%resi#ents for ta!

purposes

An individual is a resident ofG erm any for tax purposes ifthey have their dom iile in

G erm anyIf someone have been present inGermany for over )*+ days,generally considered to be a residentfor tax purposes

A orporation that has neitherits plae of m ana!em ent norle!al seat in G erm any is a non"resident#


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on-esident

& corporation that has neither itsplace of management nor legal seatin erman$ is a non%resi#ent'

Ta!pa$ers "ho are not resi#ent inerman$ are usuall$ not oblige# to

(le ta! returns unless the$ havecertain income in or fromerman$'

E! ) foreign resi#ents are sub*ect toerman income ta! if the$ have

rental income #erive# from propert$in erman$'

non-resident for tax purposes, you"ill generally still be liable to pay

tax on German-sourced income


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Taxation of ermanent /stablishments

# foreignenterprisecan dobusiness inGermany,choosingfrom various

forms oforganisation:

1' +t can set up a subsi#iar$"ith a legal structure of itso"n'

2' +t can set up a permanentestablishment

a, as an in#epen#ent

branch- or

b, as a #epen#entpermanent establishment'


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How are the profits of a perm anentestablishm ent in Germ any taxed?

If a foreign enterprise earns revenues inGermany from business operations for "hich it

runs a permanent establishment or hasappointed a permanent representative here,then these revenues are sub0ect to limitedincome or corporation tax.

The taxes levied depend on the legal structureof the foreign enterprise.

$orporation tax has to be paid on pro'tsearned at a permanent establishment by a

corporate body.


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#ny business "hich is not a corporate body is notitself liable to pay either income tax or

corporation tax. The pro'ts are attributed pro ratato the partners. The partners then each have topay income tax on their respective shares inpro'ts.

The pro'ts earned by a foreign companyspermanent establishment are also sub0ect to tradetax. This tax is incurred merely by the existence ofthe permanent establishment. Trade tax is notincurred if there is only a permanent representative

present in this country.

Goods and services provided by the business aresub0ect to German turnover tax (%#T if the place ofperformance is in this country.


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INCOM E FOM EM !"O#M ENT

12& #3 T2/ T#4/S5

aytaxonyour"orld"ideincomeandpropertyin

Germany.

/SI6/$/

paytaxonlyonincomeearnedinGermany

&/SI6/$/


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Income tax

Solidaritysurcharge 7,78

$hurch

tax*-

98


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EM !"O#EE $NON ESI%ENT&

on residents are taxed at a at rateof )78 on income from :

-artistic, sporting, entertainment orsimilar performances exercised orexploited in Germany (unless derivedfrom dependent employment sub0ect

to "age tax-license paid for the use of, or the right

to use, rights such as patents,

copyrights, or ;no" ho".


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%ed'(tion and elief

-contributions to a statutory pension insurance

-contributions to a statutory health insurance

-contributions to private life, accident,

unemployment or disability insurance- costs of professional training for a future

- #limony

-6onations to registered charities, cultural or

sports organi


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%eadline Tax et'rn for

Em ployee

employee

'le aGermanincome

tax return

+) >ay


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)*SINESS !OFIT

$&TI&

esidence

corporation

on residentcorporation


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CO!O+TE T+, INCOM E

)78

#T/


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C+"C*"+TE CO!O+TE T+,

INCOM E the annual 'nancial statements(2andelsbilan


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CO!O+TE IS S*)-ECT TO

M *NICI!+" T+%E T+,?oreign businesses "hich do not have theirregistered o=ce or place of management inGermany but receive income "hich is allocated toa German permanent establishment are alsosub0ect to trade tax. The basic trade tax rate is+.78 "hich is supplemented by the application ofa multiplier 'xed by the competent municipalityand that varies from a minimum rate of @AA8 up

to around 7AA8. Thus, the eBective trade tax rateranges from C8 to around )C.78. #s a result,corporations are sub0ect to $IT (including solidaritysurcharge and trade tax at a combined ratebet"een @@.*@78 and ++.+@78


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%E%*CTION

#ll expenses are deductible if theyhave been incurred as a result of thecompanys business operations.$ertain expenses may be disallo"ed(e.g. expenses related to exemptincome, income taxes, and interest

paid to the government on lateincome tax payments or may bedeductible only up to a limitedaccount.


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CE%IT T+,

/xpenses for traveling from home to o=ce

elocation expenses (e.g. you moved from India to Germany or

"ithin Germany

$ost for professional development li;e professional boo;s,training, language course etc.

/xpenses for professional eEuipment e.g. Faptop, des;top etc. 6ouble household (If you have primary household in India "here

your family ("ife an# .i#s is staying ?light tic;ets cost to India to meet family (spouse children bac; home

Telephone calls

2ouse ent paid in Germany

?ood expenses for 'rst + months of arrival to Germany. (roof notreEuired

There are many more avenues "hich are mostly applicable forconsultants and other "or;ing class, but for practically purposesnot listed here.

germany tax system.pptx

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