Whether you are lucky enough to have your company provide a tax preparation service to you or you have to worry about your taxes yourself it’s always good to understand some of the vocab.
To start with…
Einkommen ( income) + Steuer (tax) + erklärung (explanation) =
Einkommensteuererklärung (income tax return)
… if only they were all that easy! The following are some words, phrases and explanations are for the Anlage N document which are useful for expats.
Anlage N – Einkünfte aus nichtselbständiger Arbeit (Income from employment)
Jeder Ehegatte mit Einkünften aus nichtselbständiger Arbeit hat eine eigene Anlage N abzugeben - Each spouse with earned income (not from self-employment) must turn in Form N
- Bruttoarbeitslohn – gross pay
- Lohnsteuer – wage tax, the rate depends on which bracket (Lohnsteuerklasse) you are in
- Solidaritätszuschlag – literally ‘solidarity supplement’, enacted in 1991 originally to pay for costs from reunification and Gulf War I but is now used to pay for support for southern and eastern European countries. Historically 5.5-7.5% but now seems to be about ~1% looking at a recent paystub.
- Kirchensteuer – church tax (see our earlier post on Getting the Anmeldebestätigung
- Steuerfeier Arbeitslohn nach Doppelbesteuerungsabkommen / zwischenstaatlichen Übereinkommen – tax-free wages based on double-taxation agreements (you have to declare any income you made prior to moving to Germany within the year, but you are not taxed on it
If these few words are making your head spin (as they do mine), it’s time to call an accountant. What tax related words would you add to this list?
300 meters from the finish in Besancon! can you find Lance?
Finish of 2009 TDF Stage 14
While I have not written about how taxes work as Grenzgänger in Lörrach and Basel – YET - let me add a quick link for any of you who do have to pay in the near future and need the IBAN numbers for the Lörrach Finanzamt:
IBAN and BIC codes for the Lörrach Finanzamt
Today we visited the Vitra Design Museum in nearby Weil am Rhein.
Through May 3rd the museum has an exhibition on George Nelson, the designer who’s designs the Vitra company has been manufacturing for decades. While we only went to the Nelson exhibition the museum also offers a guided architectural tour of the campus where you can learn about museum building designed by Frank Gehry as well as the other buildings on campus such as the firestation by Zaha Hadid. We’re saving the tour for a day when the weather is nicer.
What did we like best about the exhibition? When sitting down to watch one of Nelson’s movies you get to sit (or more accurately lounge) in one of Nelson’s own designs – the Coconut Chair.
We’re continuously amazed at both the number and the quality of the museums in the Basel area and are happy to add Vitra Design to our list of museums to revisit.
Living in Germany – working in Switzerland – working in Germany – worked in the US – American citizens – a new administration and probably (hopefully) some changes to the tax code. Sounds like a recipe for fun when it comes to taxes.
Disclaimer: We’re not tax accountants or lawyers over here at Tapxe just two expats trying to work and live abroad. What I offer below is just our experience and understanding of our tax situation. This article is not a how to guide on how to avoid paying taxes, but rather is meant to help you make sure you ask the right questions and have a place to start from when you are dealing with this issue yourself.
Our situation is as follows: both of us live in Germany. I quit my job in the States several months before moving to Germany and have been working in Basel, Switzerland starting in December. My wife works for the German subsidiary of her small (< 20 employees) company in the States. Unlike expats coming over through large multinational companies well versed in expat transfers and tax issues we’re pretty much figuring it out ourselves.
Financially what are we preparing for? Paying taxes everywhere. But there’s good news – the US offers foreign tax credits (consult your tax advisor) and Germany and Switzerland have treaties to avoid double taxation. For the purpose of this discussion I’m just going to focus on Germany and Switzerland. Ask me about the US in April 2009!
To be continued…
