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Tax advice - please help
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butterbrot



Joined: 14 Dec 2004
Posts: 53

PostPosted: Thu Jan 12, 2006 1:21 pm    Post subject: what???? Reply with quote

lisa_melvin1982 wrote:
And also, 1000 eur a month is more than enough to live on in Berlin - I reckon you could get by on 600 quite easily. I can't imagine how big/nice a 1000 eur apartment must be, but the one I'm planning on moving into is 350 with a huge sitting room/nice kitchen and in a nice area (Prenzlauerberg).


I don't agree at all. Furthermore, 600/month is a slave wage for work which is supposed to involve some higher education, extra qualification and, hopefully, some experience. People working at McDonald's earn more than that. Shocked

If one is paying tax, paying into the pension system, paying for health insurance and paying for some materials to teach the courses, one wouldn't have a cent remaining on pay of 600/month. Rolling Eyes

Anyone who wishes to work for that amount per month is certainly entitled to do so but why encourage employers to pay that piddling amount? It lowers the bar for everyone and not everyone is capable of surviving on that long-term if one expects to have a life, save a bit and buy other necessaries -- like maybe a car and some clothes to wear. Exclamation
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butterbrot



Joined: 14 Dec 2004
Posts: 53

PostPosted: Thu Jan 12, 2006 1:44 pm    Post subject: Reply with quote

lisa_melvin1982 wrote:
Correct me if I'm wrong, but I thought if you stayed less than two years, then you didn't need to pay any tax. That's how I'd interepreted the rules anyway.


What "rules" were you interpreting?

Required payment of income tax begins the moment one begins earning money in Germany. As well, payment into the German pension system begins at the same time.

My source for this information is the Finanzamt and my Steuerberaterin.

(If the school(s) for which one is working is/are at all reputable, one will be filling out a time sheet which states very clearly, usually in German, that taxes and pension payments are the sole responsibility of the freelancer/employee.)

If one leaves without paying taxes it isn't legal. Whether or not one wishes to do this and take the risk is an individual matter -- apparently many choose this route. However, if one is here for the longer term it would, of course, make sense to pay from the beginning.

Furthermore, if one believes they'll only stay those two years whilst working under the Finanzamt radar and then plans to skip out -- but they then later decide to stay on, those back taxes (and back pension payments) are due and payable immediately (with penalties) once one is found out. How many could afford this catastrophe?

It's disappointing for me to read how people can supposedly 'survive' on 600-1000 per month whilst they're supposing they don't have to pay, or are scheming on how not to pay, tax and pension or for health insurance.

Many of us view this as a profession, have invested in training and education to do this work successfully, and are here for the long term. To have people come here willing to work under the table for low wages whilst not contributing to the system is disheartening and damaging to those of us who stay.

If you wish 'to see the world' -- whilst willing to live on a shoestring budget -- and then return home, why not volunteer in another country which sorely needs teachers and can't afford them?
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butterbrot



Joined: 14 Dec 2004
Posts: 53

PostPosted: Thu Jan 12, 2006 1:49 pm    Post subject: Reply with quote

hatter wrote:
Butterbrot, my friend still lives in our old flat. So he keeps telling me about them.


Since you are no longer living in the flat it would seem the best course of action is to have your friend return the post marked with something about you not living there any longer.

I assume that you did not de-register yourself from the flat? That should have been done before you left but if it wasn't the only thing that might stop the post coming from the Finanzamt is to have your friend return the post.

Otherwise, if you intend to pay the amount due, you should write directly to the Finanzamt yourself with the information that you are no longer in the country and give them your new address. How or if they will pursue this is something I don't know about.
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lisa_melvin1982



Joined: 04 May 2005
Posts: 6

PostPosted: Thu Jan 12, 2006 2:30 pm    Post subject: Reply with quote

When I was saying one could "survive" on 600 eur a month, I meant all in, after tax etc. Furthermore, I wasn't talking about teaching necessarily. I have friends in Berlin working in call centres who make about that, and they live fine.

Furthermore, how can you possibly say that accepting 600 eur a month devalues teaching? What if I was just with a really good school and I only worked say 5 hours a week and they paid me really well? You can't possibly quantify 600 eur a week unless you know how many hours I'm doing. For the record, I don't even teach English in Berlin. Ac-tually.

Furthermore (again), I personally find it kind of funny when people get uptight about TEFL and defend it to the death as a profession. I mean, let's be realistic here. It's a pretty cushy job all in. I'm not trying to get anyone's back up, because I do think a lot of people are great teachers, but that doesn't mean we have to get all preachy about it, does it? It's a job, sometimes a hard job, but then again, some people would find working in McDonalds a challenge.

Re tax, well, maybe it depends where you come from (I'm from the UK, so we have different regualtions from non-EU countries) but as far as I've heard, and as far as I can make out, you don't need to pay any tax, then if you continue working for over two years, you get a huge tax bill. Maybe I'm wrong, but everyone I've spoken to has said that is the case.

And I'm not interested in any arguments! Discussion, fine, but when people jump on things and try and get all iffy, well there's just no need, so chill out butterbrot.
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butterbrot



Joined: 14 Dec 2004
Posts: 53

PostPosted: Fri Jan 13, 2006 3:42 am    Post subject: Reply with quote

lisa_melvin1982 wrote:

And I'm not interested in any arguments! Discussion, fine, but when people jump on things and try and get all iffy, well there's just no need, so chill out butterbrot.


Well, whatever Lisa. Your specious point(s) of view and reasoning are your right to have and hold.

Btw, I'm Irish and, as far as I know we're still in the EU unless you've heard differently, the EU regs apply to me as well. Funny about those different German tax "rules" for two of the EU countries. I wasn't aware that the EU was setting income tax policy for Germany but perhaps the Finanzamt simply hasn't been notified yet.

If you do get a tax bill for the first two years, after two years, at least you can't say someone didn't attempt to set you straight. I think that's enough said. Have a nice life.
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lisa_melvin1982



Joined: 04 May 2005
Posts: 6

PostPosted: Fri Jan 13, 2006 12:03 pm    Post subject: Reply with quote

Actually butterbrot, I fully intend to pay my taxes, so you know, there's no point in getting het up at me for being a tax dodger. I'm squarely above board.

But I'm pretty sure you can go and get a form that says you're staying less than two years and therefore not pay any tax. Maybe I'm wrong (I never went and found out cos I intend to stay longer) but I'm pretty sure you're exempt if you're staying less than two years or at least you used to be able to, cos I know people who did just that.

I am fully aware of Ireland's EU status, I do apologise if I didn't recognise your brogue via the internet.
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Chris



Joined: 28 Jan 2003
Posts: 116
Location: Melbourne, Australia

PostPosted: Thu Jan 19, 2006 12:12 pm    Post subject: 2 year tax exemption Reply with quote

Hi all,

Lisa is right. There IS a 2 year tax exemption under special circumstances. Unfortunately, I don't quite know what they are, but I personally have a nice stamped form from the Finanzamt stating that I don't need to pay Lohnsteuer for 2 years.

After these 2 years, I will have to pay back taxes. I don't plan on working after this time though. We'll see what happens in the next few months though.

BTW, I'm American, but the school I work for is British/German.

Chris
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butterbrot



Joined: 14 Dec 2004
Posts: 53

PostPosted: Thu Jan 19, 2006 8:07 pm    Post subject: Re: 2 year tax exemption Reply with quote

Chris wrote:
Hi all,

Lisa is right. There IS a 2 year tax exemption under special circumstances. Unfortunately, I don't quite know what they are, but I personally have a nice stamped form from the Finanzamt stating that I don't need to pay Lohnsteuer for 2 years.

After these 2 years, I will have to pay back taxes. I don't plan on working after this time though. We'll see what happens in the next few months though.

BTW, I'm American, but the school I work for is British/German.

Chris


You wrote that "after these 2 years, I will have to pay back taxes" and this is precisely the problem in interpreting the German tax law so loosely by anyone posting here that one is "exempt from taxes for the first two years".

No one is "exempt" from paying the German income tax but there is, in the tax law, a provision for a two-year grace period in paying tax -- which must be paid after the two year period, in full, accompanied by a tax payment for the 3rd year if one decides to remain in Germany. But, and this part is important, the first 2 year's worth of taxes is due after the two year period.

How many teachers does anyone believe might have that sort of cash lying about on a teacher's salary after two years of working here?

Hypothetically, if one works for 2 years plus one month (or one day) extra, the full first 2 year's of taxes is due and payable.

Caveat:
I would strongly advise anyone reading these tax posts not to accept, without question, anything I or anyone else writes here. Rather, absorb all the opinions and knowledge people say that they have and take this information directly to the Finanzamt and question them directly and closely. Take an interpreter if you must but be sure you understand exactly what your tax responsibilities are. Get everything in writing. No public official can ever be held to verbal statements.
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Matthew



Joined: 16 Jan 2003
Posts: 14

PostPosted: Tue Jan 24, 2006 3:12 pm    Post subject: The 2 year Tax exemption! Reply with quote

Hello,

Chris, Lisa and/or others.

Does anyone have any further info on the 2 year tax exemption for people staying 2 years or less.

My German is not good and so would like as much info as possible before going to Finanzamt.

I presume that if you decide to stay for longer than 2 years then you have the tax bill to pay for the first 2 years - but are there penalties - even if you were tax exempt??

Anyway any info on this much appreciated,

thanks,
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butterbrot



Joined: 14 Dec 2004
Posts: 53

PostPosted: Wed Jan 25, 2006 1:07 am    Post subject: Re: The 2 year Tax exemption! Reply with quote

Matthew wrote:
Hello,

Chris, Lisa and/or others.

Does anyone have any further info on the 2 year tax exemption for people staying 2 years or less.

My German is not good and so would like as much info as possible before going to Finanzamt.

I presume that if you decide to stay for longer than 2 years then you have the tax bill to pay for the first 2 years - but are there penalties - even if you were tax exempt??

Anyway any info on this much appreciated,

thanks,


further info? Rolling Eyes I thought there was quite a bit here already.

For the definitive answer on WHERE/HOW one gets this 2-year exemption check this out: http://p219.ezboard.com/feltfrm1.showMessage?topicID=257.topic
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Matthew



Joined: 16 Jan 2003
Posts: 14

PostPosted: Thu Jan 26, 2006 2:28 pm    Post subject: Reply with quote

Quote:
For the definitive answer on WHERE/HOW one gets this 2-year exemption check this ....

why is info on that link the definitive answer??
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poro



Joined: 04 Oct 2004
Posts: 274

PostPosted: Sat Jan 28, 2006 8:52 pm    Post subject: Re: The 2 year Tax exemption! Reply with quote

butterbrot wrote:
further info? Rolling Eyes I thought there was quite a bit here already....


Good link - I didn't know about that, but think it would be better to kill the myth that "English teachers don't have to pay tax", because in by far the most cases that can't be true - Germany isn't Bermuda, and actually almost everyone pays tax.
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poro



Joined: 04 Oct 2004
Posts: 274

PostPosted: Sat Jan 28, 2006 9:10 pm    Post subject: Reply with quote

Matthew wrote:
why is info on that link the definitive answer??


Matthew, you can check it out if you want, but it isn't really the question.

Just ask yourself if it's realistic to believe that everyone in Germany pays tax..... except English teachers. It can't be true, of course.

A freelancer could probably work for 1-2 years without seeing a tax demand, but he still has a tax liability for all that time, nevertheless.

(Unless he earned extremely little)
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