News on Miscellanious Topics for Private Taxation

Ex Does not Always Have to Agree to Joint Tax Return

2008-11-07T23:03:11+01:00

Ex Does not Always Have to Agree to Joint Tax Return

A divorced couple was not able to effectively communicate anymore. The woman, shortly before their divorce, asked her husband if he would agree to be jointly taxed. Joint tax declarations are only possible for married couples. However, in the year of separation, the law exceptionally for the last time allows you to declare your taxes jointly. The husband refused. Only after receiving the assessment did he learn he fooled himself with his stubbornness. She received a tax reimbursement of EUR 3,500 and he had to pay EUR 7,000 on taxes. If they had jointly declared their taxes, they might have not had to pay anything at all.

Exemption for Interest Withholding Tax

2008-11-07T22:41:19+01:00

Exemption for Interest Withholding Tax

Capital Gain in Germany is taxed just like in Britain and the USA. And, like in the USA, German Banks must also withhold a percentage of an account holder’s profits made from capital gains (withholding tax). Fortunately, just like in the USA, this backup withholding by the bank can also be exempted, at least up to a certain amount. Unfortunately, starting in 2007 the German Exemption for Withholding Tax (Freistellung) has been reduced to a limit of only € 750 / € 1,500 (single / married). The good news is that, following the trend in improved electronic banking services, an application for exemption from withholding tax (Freistellungsantrag) can now be made to a bank online. And, you are allowed to split the exemption amount between two or more accounts. The advantage is that you do not have to fill out the tax paperwork in the following year and wait to get your refund on the exempted amount for withholding tax. .

Inheritance Tax Act is Invalid

2008-11-07T23:04:53+01:00

Inheritance Tax Act is Invalid

After five years, the BVerfG (re BvR 421/05 of November 7, 2006 published on January 31, 2007) came to a decision that the present estate tax act is partly unconstitutional.

Is Interest from Foreign Life-Risk Insurances Subject to Taxation?

2008-11-07T23:05:42+01:00

Is Interest from Foreign Life-Risk Insurances Subject to Taxation?

The BFH (re VIII R 47/01 judgment of March 1, 2005, published February 15, 2006) ruled if and how interest obtained from investing in life-risk insurances abroad are to be taxed.

Limited Taxation for an Employee relocating Abroad?

2009-09-28T07:22:15+02:00

Limited Taxation for an Employee relocating Abroad?

When Jerry lost his job, he negotiated a severance pay and then headed home. His German tax office wanted to fully tax him but Jerry only wanted to be partially taxed on this severance pay. When you read this article, you will know who is right because the Federal Tax Court had it it's say on August 27, 2008 (re I R 81/07; published on December 17, 2008).

Severance pay, which is compensation for lost future earnings, for a worker who has moved out of country, does not count as a limited, taxable, domestic income for the purpose of § 49 Abs. 1 Nr. 4 EStG 1997.

Missing Intention to Achieve Income When Employed

2009-12-01T07:26:01+01:00

Missing Intention to Achieve Income When Employed

Will the tax office accept a surplus of expenses instead a surplus of income? The Federal Tax Court decided this question on August 28, 2008 (re VI R 50/06).

Personal Liability of Partner for their Company’s Tax Debts

2009-02-02T16:58:11+01:00

Personal Liability of Partner for their Company’s Tax Debts

Can partners of a GbR (private partnership with unlimited liability of partners in addition to the company liability itself) be held personally liable for tax debts of their company? The BFH decided this question on May 9, 2006 (re VII R 50/05).

Prize Money for Participating on TV Show Taxable as other Earnings

2008-11-07T23:06:45+01:00

Prize Money for Participating on TV Show Taxable as other Earnings

When being paid to participate in a TV show as a candidate, is the money a tax-free reward or is it a taxable income? What do you think? The BFH ’s judgment of November 28, 2007 (re IX R 39/06) now gives you the answer.

Reimbursement of Overpaid Taxes among Bankrupt Couples

2009-04-28T15:42:43+02:00

Reimbursement of Overpaid Taxes among Bankrupt Couples

Paying taxes is already awful enough but this question tops it all: Who is to be reimbursed the overpaid taxes in general and especially when one of the married couple becomes bankrupt? The BFH gave an answer to this question on September 30, 2008 (re VII R 18/08).

Riester-Rente now also Granted Abroad

2009-10-06T06:49:20+02:00

Riester-Rente now also Granted Abroad

This article is about the three complaints of European Commission has on the Riester-Rente, and the judgment of the European Court of Justice of September 10, 2009, re C-269/07.