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Location: God's Gift to Mankind for flying anything
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Quote:
Originally Posted by marione
Apparently Germany would impose an income tax to all people who live there for at least 183 days of the year. I honestly think it's fair, and I can probably expect something similar in most countries.
However the big question is: how much will they tax me?
It has been so long since I lived and worked there, I really do not remember anymore what it was (percentage-wise). I do remember that due to not being able to offset the tax rate with deductions, the tax I paid in Germany was way higher than what I used to pay Stateside.
My US income tax is not likely to go down. If you are *out of the country* a minimum amount of days (dunno how many exactly, but I think it is 150 days ?) you will not pay tax in the USA, but you still have to file. What you need to do is what I mentioned in one of my earlier post and get together with some tax guru, *very familiar* with International Tax Laws. I decided to not stay forever in Germany (I am sorry about that *decision* now), and thus opted out about paying the equivalent of USA Social Security payments in Germany and thus opted in for paying those fees in the USA, based on my total income (some of my income was paid in the USA, to pay for certain things that were still required to pay {house, etc.})
It sure won't be easy to convince the government to tax me less because I reside abroad and I don't use American services... but I do need to find out how much will I get taxed abroad on top of that. Anyone has any clues? I'm thinking to contact the German embassy but I doubt they'll know much about taxes. I think they do. Just contact them and let them know which area you are looking at, to work in.
About a work permit while you are in Germany.
First you need a permit to reside there ... (If you want to *overstay* your visiting permit) , but you need some kind of work to get a residency permit (the forever going in circles syndrome).
I had a work permit, because the company already had an office and plant there. So we (wife kids and I), all received residency permits (Aufenhaltserlaubnis) because of the job that was waiting for me. My wife only had a residency permit but no *work permit* (Arbeitserlaubnis), meaning she was NOT allowed to work. After 5 years, the company I worked for was sold and I went *on my own*. I do not remember exactly what I had to go thru with, but I did end up with a work permit to have my own company there, which I set up with all the required legal requirements satisfied. Because I ended up with *my own company* there, I put my wife in as one of the employees, and so she received a work permit also. I also remember that you have to renew those permits every year ... ?
About the decision I am now sorry for, the reason is what Neuling described as Doppelbesteurungsabkommen (those Germans can make up words that are often over a mile long ... Mensch, reine Wahnsinn ...). If you pay the equivalent of Social Security in Germany, you can actually get to stay in Germany if you so desire for the rest of your life and the USA equivalent of Social Security in Germany, or you can get it in the USA also, depending on where you live. Because I opted out, I never can get the amount the Germans do. I can still move to Germany as a retired person, but would never fully enjoy all the benefits Germans do as a retired person. I am not sure, but I think they have better provisions for retired persons, compared to the USA. I may be wrong ...
Quote:
Originally Posted by Neuling
Most developed countries have mutual agreements to avoid such tax problems, the nice German word for that is Doppelbesteuerungsabkommen
Germany - Tax Treaty Documents (http://www.irs.gov/businesses/international/article/0,,id=169486,00.html - broken link)
By the way, I guess your company has to have a registered branch in the country you want to move to. Otherwise you would not be allowed to work there I suppose, as one cannot move from the US to the EU or vice versa as a freelancer.
What Neuling describes here may be a recent decision since I worked there in the 80's. As I mentioned above, I did get a work permit by creating my own Company there. Since I had a registered Company there (registered in my name), I was thus NOT *freelancing* !
Last but not least, with all these legal things seemingly insurmountable, please do not give up on your dreams !!!
Afaik Doppelbesteuerung has nothing to do with Social Security, it is IRS only.
In Germany social security as such does not even exist, there are the separate pension insurance and health insurance systems instead. Here in Portugal, however, they are all in one Social security system. Such differences render the EU-wide harmonization of social security quite tricky and complex. I pay my taxes in Portugal only. I also pay my social security contributions in Portugal, still they are somehow converted into the German pension insurance system until the day I assume the Portuguese citizenship. I am sure that whole mess is not to my benefit, but I will never be able to retire anyway, so I don't really care
Yes, he or she can establish a company of their own of course. I have no idea what the requirements are for a non-EU citizen, though.
He really should see an expert on international tax law before getting into legal problems. In countries such as Germany and the US with all their sophisticated interlinked IT systems anything illegal will be detected.
Thanks for your detailed answers Neuling and irman (or whatever your actual names are )
Let me say once again that I'm an Italian citizen. So no Aufenhaltserlaubnis, Arbeitserlaubnis, or Whatever-erlaubnis. I think all I need to do is register my new address to the local office (Einwohnermeldeamt) and I'm good to go, at least residency-wise.
Not sure about the "freelancing" thing. I will not be a freelancer or a consultant. I will still be a full-time employee of an American company. I will just happen to work remotely, but I'm not sure that will make so much of a difference, especially because of the free movement of workers for European citizens.
By the way no, I am not fully convinced about Germany, but yes, it does seem to be one of the best choices at the moment. I don't think I would be too happy to start learning a new, forth language from scratch. Spanish should be relatively easy to learn for an Italian native speaker, so I'm still keeping that option. But that basically rules out every other country
Still, I suppose your US employer would have to have a branch in Europe, probably even in the country you choose. I can't imagine that is is legal for an Italian to work from Germany or even from Italy for a US company when said company does not have a registered branch there.
Still, I suppose your US employer would have to have a branch in Europe, probably even in the country you choose. I can't imagine that is is legal for an Italian to work from Germany or even from Italy for a US company when said company does not have a registered branch there.
ok I'll investigate. I read online of other people who have done the same thing in various EU countries, and all they had to worry about was the work permit, in case they were not EU citizens.
I read the US-Germany Tax treaty, and out of 48 pages I think none applies to me!
I don't have my own company, I'm not a freelancer, and I'm not a US citizen, and the tax treaty seems to cover just that
Id say - Nurnberg Germany or Prague czech republic or Croatia maybe?
Also Poland is really good for what you are looking for, climate beasically the same with german one but cheaper cost of living and economy is doing well..
Avoid Spain, their job market is terrible
Hello again! So this is happening!
Without asking you to read again the OP, I work for an American company, to which I had asked (and just obtained) to work remotely from Europe.
I was deciding where to go, and that question still remains. All I know is that I will fly back to Europe before Christmas, and start working from there on January 2nd.
Right now I'm looking at Barcelona and Berlin. Once again, I'm a citizen of Italy; learning Spanish/Catalan shouldn't be an impossible task (I live in California - I already hear plenty of Spanish every day), and I've been studying German for about 1 year, although I'm far from being fluent.
Other cities/countries don't really appeal to me, either because of their climate or language, which are critical to me. Again I already have a job, so the high unemployment in Spain is not really a concern to me.
Anyway has anything happened over these past few months that would change your recommendation? Any other place I should be looking?
I will be self-employed, so the ease of setting up that process needs also to be considered, although I would assume not many people know much about that.
Cheers
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