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Work tax free in Germany!
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Hod



Joined: 28 Apr 2003
Posts: 1613
Location: Home

PostPosted: Fri Jul 16, 2004 12:49 am    Post subject: Work tax free in Germany! Reply with quote

(after flying there by pig air)

There�s a great job on umm another jobs board. It�s in Frankfurt! Check this out:

Quote:
The salary will be 2500 euros per month.

(Please note that non-German nationals living and working for an employer in Germany are usually entitled to work for 2 years without paying income tax.)


I could be wrong, but isn�t this tax-free tale about as credible as Santa Claus being a lap dancer from the planet Zeptune? Anyway, let me just pull this clothes peg off my nose to say that sure you�ll work tax-free, but you�ll get stung later on in your own country or in Germany.

Be on the safe side; don�t believe anything a German employer, especially some Johann-come-lately freelancer with a fax machine in his bedsit, tells you about tax. It�ll either be wrong, outdated, lies, more lies, inaccurate or a combination of all six.
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Chris



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

PostPosted: Fri Jul 16, 2004 9:06 am    Post subject: Reply with quote

Well....

I have in my possession a signed and stamped approval for the waiving of income tax for a period of 2 years from the Finanzamt...

There may be problems in the future. I don't really know. BUT, I am willing to take that chance. What I DO know is that if I decide to stay longer than these 2 years, I must start paying taxes as well as pay all the tax for those first two years retroactively! That ain't a fun prospect.
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longtimeteach



Joined: 25 Apr 2004
Posts: 107

PostPosted: Fri Jul 16, 2004 12:00 pm    Post subject: that's the loophole Reply with quote

It sounds good on paper, doesn't it? It is, in fact, true that if you only stay those two years and leave again you don't have to pay the tax but if you stay longer, as Chris says, you'll have to pay it all retroactively.

How many of us knew that we'd really go away after two years? Better to begin paying it from the start, IMHO. That way one has the choice to stay or go after the two-year limit has expired.
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koldijk



Joined: 25 Mar 2004
Posts: 5
Location: Calgary

PostPosted: Sun Jul 18, 2004 9:46 pm    Post subject: tax free Reply with quote

this exemption for "teachers" has been around for at least 20 years according to and proven by my boss... furthermore, i am currently workign in dusseldorf...my paycheck deductions are health care and german pension (whatever that is)

martijn koldijk

http://geocities.com/koldijk
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Susan K



Joined: 22 Jul 2004
Posts: 19
Location: (East Germany)

PostPosted: Sat Jul 24, 2004 11:06 am    Post subject: Conscientious employers do exist! Reply with quote

I am posting this here partly as a response to the various messages that suggest that a lot of TEFL teachers are cynical and not interested in taking their share of the costs of a welfare state, and that there are employers who play to this in order to get (and exploit?) staff. (... And partly in hopes of finding a member of staff who would be as honest as I try to be, see below).

The German bureaucracy we love to hate is actually a means of ensuring there is little corruption, and as such I value it even as I moan about it!
Paying tax as you go, you can probably reclaim some of it on Dec 31st in at least the first "year". Paying your share of health insurance (the employer has to pay the other 50%) means you have access to proper medical care. As an EU citizen your pension contributions here count in your home country, too.

And while so many of the people I am teaching are receiving the lessons as either a buffer against unemployment or a lifeline to clutch to get out of it, I feel we should be able to look them in the eye. To have the chance of employment anywhere you go, just because you learnt English at your mother's knee, is a privilege that some of the people whose messages can be read in Dave's ESL Caf� International Forum don't seem to recognise they have. On a similar tack, I have to support the contributor(s) who say you should be able to speak German to work here. The effort it requires is accorded respect. That respect is quite as necessary to you in a society so geared to educational prowess as is the ease of everyday communication brought by knowing the language.

Edited by Mr. Kalgukshi 07-25-04

It's only in the summer that I have time to check in to the Forum, but thank you all for an interesting read when I did this time! I'll add my website address, not sure quite how the system works yet! [http://www.qualitytranslations.de]
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longtimeteach



Joined: 25 Apr 2004
Posts: 107

PostPosted: Sun Jul 25, 2004 1:15 pm    Post subject: more on tax-free working Reply with quote

From www.t-english.de

" finally managed to talk to someone at the tax office today and here is what I was told about the two years tax-free business.

First, it does not apply to freelance teachers! You have to be employed by certain schools or institutes to qualify... So, if you are employed at a particular language school or institute, you have to make sure that you can work there "tax-free" for two years. What applies to teacher X, may not apply in your case.

Even if you are released from paying tax in Germany, you are obliged to declare this income in the UK and are liable for tax there. The chap I spoke to did not know whether the same was true for social insurance payments.

I'm afraid that English teachers from countries other than the UK will have to find out whether they can be released or not. This is not a blanket ruling and it does not apply to English teachers from all English-speaking countries.

I'd say it is best to check where you stand with your local tax authority before assuming that you don't have to pay any tax here.

By the way, as I've already said, I am not an expert in this area. I'm only passing on what someone at the tax office told me. You really should check this information out with your local tax office or an accountant.

----------------------------------------

"The law clearly states, having looked into this on a number of occasions, that EU citizens from countries where English is spoken as a native language, can work for 2 years tax free in an EMPLOYED position - not freelance.

Tax most certainly does not have to be paid in the UK!!! It is an agreement that was made many years ago when the market was different to today and TEFL trainers on the market did not meet the demand!

Be careful not to stay in Germany beyond 2 years and it is OK. If you stay 1 day longer you will be stung with a demand for 2 years income tax!!

In addition if you stay out of the country for 6 months, you can return and do another 2 years stint on a tax free country.

My school operates this regulation and it has been checked by the Tax Department - it is totally legal!!"

My comments: please note that these comments refer to an EMPLOYED position and NOT freelance!
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hatter



Joined: 13 Jun 2003
Posts: 10

PostPosted: Tue Aug 10, 2004 10:24 am    Post subject: To pay or not to pay Reply with quote

Hi there

I was told by my friend who went to the tax office a few weeks ago that if you earn less than 17 000 Euros a year (thats just over 1400 per month GROSS) you dont have to pay tax. I earn less than that, but I am appaoching my 2 year mark and we will see if I get any letters. I am planning on leaving soon anyway. Does anyone know if that 2 years after you stated working or 2 years since you came into the country? My first 4 months I was trying to find work. I am a freelancer, so I dont really know what applies to me. I should probably find out, but Im hoping if I ignore it it will go away Confused

I dont want to piss off the Authorities - any advice?
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longtimeteach



Joined: 25 Apr 2004
Posts: 107

PostPosted: Thu Aug 12, 2004 8:13 pm    Post subject: Reply with quote

The limit on not having to pay tax on earnings, as of 1999, was 13,000DMs per year so I very much doubt that you can earn 17,000 Euro per year without paying tax. The limit, effective in 1999, would have been 6000 in Euro, so I think you see my point. PLEASE check with the Finanzamt on this limit on earnings tax thing. All you have to do is ring them up and ask; you needn't give your name. But, don't telephone off your handy or home telephone number.

You should check with the Finanzamt regarding the date when your tax begins, but I THINK, since the taxes are done on the calendar year that you'd have to figure from when you began earning. For example, if you arrived in late 2002 but didn't begin earning until March 2003 then you'd owe tax for the calendar year of 2003 and 2004 and so on.

Also, if you haven't been paying into the pension system (the BfA), you will be assessed that amount as well - that's 20% of your gross earnings assessable from the first day you began working.

Good luck and be careful!
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Susan K



Joined: 22 Jul 2004
Posts: 19
Location: (East Germany)

PostPosted: Fri Aug 13, 2004 5:21 am    Post subject: Tax relief Reply with quote

I don't know the current "personal allowances", as we would call them in the UK, but you go into a different tax class if you have children. Also, if you are working here legitimately you can apply for Wohnungsgeld if your rent is more than you can afford - my husband says this will apply to all nationalities. (One hears of astronomical rents in the West ... rents in the East are pretty low compared, especially if you like flat-sharing. The German reserved character means that this operates on a real "space-respecting" basis.)
There are loads of things that you can claim for tax relief, including your journey to work, though that is under threat, I believe, as the state tries to balance its books.
There are lots of websites explaining all the ins and outs but they are, of course, in German. Anyone seriously interested could send me a private mail and we'll do a search for the specific category you're in.
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Hod



Joined: 28 Apr 2003
Posts: 1613
Location: Home

PostPosted: Tue Aug 17, 2004 12:33 pm    Post subject: Re: Tax relief Reply with quote

Susan K wrote:
rents in the East are pretty low compared


Give figures please. I never believed this East is cheaper than West thing.
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Susan K



Joined: 22 Jul 2004
Posts: 19
Location: (East Germany)

PostPosted: Tue Aug 17, 2004 1:09 pm    Post subject: Reply with quote

Just did a quick copy-and-paste job:

Ilmenau Zentrum 100 m2 � 460,� Details...
Ilmenau Am Eichich 70 m2 � 340,� Details...
Ilmenau Stollen 19 m2 � 144,� Details...
Ilmenau Zentrum 24 m2 � 240,� Details...
Ilmenau Innenstadt 38 m2 � 220,� Details...
Ilmenau Zentrum 75 m2 � 170,� Details...
Ilmenau P�rlitzer H�h...12 m2 � 100,� Details...
Ilmenau Zentrum 12 m2 � 150,� Details...
Ilmenau Ilmenau 20 m2 � 170,� Details...
http://ilmenau.studenten-wohnung.de/
(The sq.metres do not include kitchen and bathroom when you are calculating the size of a flat - haven't checked which of these are a whole flat or just a flat-share but the website should be easy to use. Price is always given as monthly rent.)
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poro



Joined: 04 Oct 2004
Posts: 274

PostPosted: Tue Oct 05, 2004 4:25 pm    Post subject: Re: To pay or not to pay Reply with quote

hatter wrote:
I dont want to piss off the Authorities - any advice?


The main thing is not to ignore deadlines set by German authorities, hatter - for example, for handing in declarations.

But if you're leaving Germany soon, you almost certainly won't have any deadlines to miss, and therefore have nothing to worry about.

One important thing is to remember to de-register when you leave the country, because this cuts out complications.
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longtimeteach



Joined: 25 Apr 2004
Posts: 107

PostPosted: Wed Oct 06, 2004 1:55 pm    Post subject: Reply with quote

Quote:
One important thing is to remember to de-register when you leave the country, because this cuts out complications.

If hatter is leaving and never planning to return, it's a non-issue about de-registration.
I've heard this regulation was recently changed and one needn't register after moving/leaving. I'll try to get more information on this supposed change from a friend who works for the Ausl�nderbeh�rde.
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poro



Joined: 04 Oct 2004
Posts: 274

PostPosted: Thu Oct 07, 2004 6:06 pm    Post subject: Reply with quote

longtimeteach wrote:
If hatter is leaving and never planning to return, it's a non-issue about de-registration.


I wouldn't necessarily disagree with that, but what's the point in keeping your record active in the database - meaning that they will continue to send you tax forms and the like - when it is so easily avoided by deregistration?

Quote:
I've heard this regulation was recently changed and one needn't register after moving/leaving. I'll try to get more information on this supposed change from a friend who works for the Ausl�nderbeh�rde.


It Germany, it's not a bad idea to trust the written word. In fact, it's a very good idea, imo.

You can obtain the latest versions of the Melderechtsrahmengesetz and the rules of specific states from the respective state's Datenschutzbeauftragte(r) for free.

These laws state exactly what the individual has to do and when he has to do it. No German official is allowed to do more or less than the law requires, and if they ask for more information than the law requires - which German municipalities frequently do - you tell them you would like to give information according to the law, and you SHOW them the law.

In simple matters like registration, they will concede.
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longtimeteach



Joined: 25 Apr 2004
Posts: 107

PostPosted: Fri Oct 08, 2004 11:13 am    Post subject: de-registration Reply with quote

I telephoned the AB u. EWamt for this info yesterday: The law has been changed on de-registration. One doesn't have to de-register anymore but one does still have to register at a new place.

The de-registration is now the responsibility of the landlords which they will do to save costs on public services (i.e. trash, water, etc.). In case this isn't clear why the landlords would save costs: in German apartment buildings the public services charges are determined by how many people are registered as living in a given building.

So in the event one leaves Germany they will be de-registered by someone else in time. No penalty applies for then registering at a new place if one should return to Germany in future. That's all aside from and has nothing to do with taxes of course.
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