Germany

money.qxd 04/01/2006 15:14 Page 42
MONEY
42
Taxation
continued from page 40
Another curious quirk of the German taxation
system is the 'Solidaritätszuschlag' (solidarity
surcharge) levied on every citizen to
help meet the enormous costs of rebuilding
the former communist East. The amount to
be paid is currently calculated as 5.5 percent
of your total income tax or company tax
payments.
If you’re on a self-employed basis, you face
a more complicated system. Your earnings
will usually be subject to ‘Mehrwertsteuer’
or MwSt (value-added tax or VAT). The
scale largely depends on your profession or
other income-earning activities.
The self-employed must normally make
quarterly instalments and tax declarations
listing income and all deductions on
which MwSt has been paid. Ask your
accountant for a guide to how much you
might be required to pay each month.
As part of the government's tax reform,
income tax for those on the lowest rung
has fallen to 15 percent from 16 percent
SERVICE PROVIDERS
Americans' Income Tax
Service
Katharinenstrasse 12
10711 Berlin
030 890470
www.americans
incometaxservice.com
Martin Brune
Sudetenstrasse 125
47249 Duisburg
0203 9304602
www.stb-brune.de
First Command Financial
Services, Inc.
Moehringer Landstrasse 87
70563 Stuttgart
0711 7823943
www.firstcommand.com
this year; the top rate has moved to 42 percent
from 45 percent. There is a tax-free
exemption of EUR 7,664.
SOCIAL SECURITY
Essentially, all employees working in
Germany are subject to the social security
system, which covers statutory pension
funds, unemployment insurance, contributions
to the statutory care scheme (nursing
at home), health insurance and work accident
insurance. Many professional groups
are, however, able to opt out of the state
system and join their professional organisation's
group pension plan. At the same time,
many public servants qualify for state pensions
without having paid into the system.
SPECIAL TAX RELIEF
First Command Financial
Services, Inc.
Abraham Lincoln Strasse 2
65189 Wiesbaden
0611 977090
www.firstcommand.com
Independent Insurance
Broker and Investment
Adviser
Hainstrasse 2
61476 Kronberg
06173 995020
www.insure-invest.de
Paul A. Kiefer, Esquire
US Attorney and Tax
Advisor
Klingelhoefer Strasse 5
10785 Berlin
030 24085212
Employment income connected to special
construction, engineering or consulting
work outside Germany lasting at least
three months is tax-exempt provided the
employee works abroad for a German
employer and there is no tax treaty with
the foreign country.
Ocean Management
Kölnerstrasse 31
60327 Frankfurt
069 73900877
www.oceanmanagement.com
COMPUTER SYSTEMS
Genesis Systems
Tumblinger Strasse 15
80337 München
089 55269030
www.genesis-computersupport.com
GERMANY EXPAT SURVIVAL GUIDE WWW.EXPATICA.COM