German resident: moving away but family stays

[Marzio]

you forget about the costs to do all this!

I didn't forget about that at all, infact depending on the income he will generate i said "it could be worth"

Better just to pay taxes in Germany

That's obvious but he is moving for a family emergency so he can't stay in Germany to make fun of Bayern's yesterday night defeat.

 

[JosephLL]

Amazing, this will be taxation gangbang!

Company will probably be considerd tax resident in Italy because of place of incorporation and management.

As for personal income taxes you will be liable both in Italy and Germany (for the remaining part) and you will have to present tax declaration both in Italy and Germany but in Germany you will have to ask for credit for taxes paid in Italy.

WTF are you putting yourself in that shitshow?

Instead of moving to Italy move somewhere near the Swiss border (either alone or with family), form a Swiss company and commute daily to Switzerland for work.

Can you elaborate more on your last paragraph? How would that help?

 

[boomy]

I didn't forget about that at all, infact depending on the income he will generate i said "it could be worth"



That's obvious but he is moving for a family emergency so he can't stay in Germany to make fun of Bayern's yesterday night defeat.

No but he can keep his things in Germany and pay german tax. No one cares for how long he stay in Italy because it is within EU!

 

[daniels27]

No but he can keep his things in Germany and pay german tax. No one cares for how long he stay in Italy because it is within EU!

Yes, but I think he can save money by paying tax in Italy.

 

[Marzio]

Can you elaborate more on your last paragraph? How would that help?

Are you talking about staying in Germany and forming a Swiss company?

By forming a Swiss company he could immeditaly save 50% on German CIT and then he could take out a minimal salary + dividends or minimal salary while reinvesting the company profits.

 

[daniels27]

Are you talking about staying in Germany and forming a Swiss company?

By forming a Swiss company he could immeditaly save 50% on German CIT and then he could take out a minimal salary + dividends or minimal salary while reinvesting the company profits.

Yes, but he would need to manage it from within Switzerland.

 

[Marzio]

he would need to manage it from within Switzerland

and commute daily to Switzerland for work.

 

[paterke]

I would like to understand more regarding the article 4, cited by @Marzio. Up to which point is one "tax prisoner" in a country?

- If I divorce my wife, am I still prisoner?
- If I no longer own an apartment, am I still prisoner?
- Does having kids in a different country of residence, makes you tax prisoner of that country?

 

[Marzio]

Up to which point is one "tax prisoner" in a country?

In your case you should divorce and sell your German house.

 

[369]

It always depends on the country.
Germany is very insane.
Its a facist state which will milk their citizens to death.
There its enough you hold only a key to an appartment located in germany and you will be already considered a tax resident as you could use that key to sleep in a room not important if its your appartment or not

 

[xnpu]

Depending on how exactly you're self-employed, I would expect an exit tax on that too. They won't just let you move a business abroad without getting some.

 

[JohnLocke]

In your case you should divorce and sell your German house.

I would agree with this and that should be sufficient to avoid troubles.

 

[jkl197]

I would like to understand more regarding the article 4, cited by @Marzio. Up to which point is one "tax prisoner" in a country?

- If I divorce my wife, am I still prisoner?
- If I no longer own an apartment, am I still prisoner?
- Does having kids in a different country of residence, makes you tax prisoner of that country?

any chance you could move your family to italy?
that would make everything much simpler and you could enjoy the 50% tax discount

 

[paterke]

any chance you could move your family to italy?
that would make everything much simpler and you could enjoy the 50% tax discount

No, not really, unfortunately, at least not in the immediate future.

One more question, since you guys are so patient with me.

If I move to Italy and open a company (Srl) and I give myself a salary, the funds that stay in the company should not be taxable from the German taxman, but only from the Italian one.
I assume my salary, would be taxed by both jurisdictions.

 

[JohnLocke]

If you own the company and you are also a manager of it and you are tax resident in Germany, you will get taxed there from all income in the company and personally. The the beauty of the "new regulations" which took place 5 or more years ago.

 

[paterke]

If you own the company and you are also a manager of it and you are tax resident in Germany, you will get taxed there from all income in the company and personally. The the beauty of the "new regulations" which took place 5 or more years ago.

Ok, I suspected something like this. Are these new regulations German-specific or EU-specific?

Thanks

 

[Marzio]

If you own the company and you are also a manager of it and you are tax resident in Germany, you will get taxed there from all income in the company and personally.

Not if he owns the company but manages the company from another country.

In that case by virtue of double tax treaty between the countries, business profits will be taxed only in the country where those profits were accrued.

Your statement is valid if he would be managing the company from Germany.

 

[paterke]

Not if he owns the company but manages the company from another country.

In that case by virtue of double tax treaty between the countries, business profits will be taxed only in the country where those profits were accrued.

Your statement is valid if he would be managing the company from Germany.

This should be my case then, in that sense my accountant was correct.

 

[Marzio]

my accountant was correct.

If when he said that you shouldn't be liabe for taxes in Germany he was referring the Italian company then yes, otherwise if he was referring to you as a natural persona then he was wrong.

Only you know exactly what you asked him.

 

[JohnLocke]

In that case by virtue of double tax treaty between the countries, business profits will be taxed only in the country where those profits were accrued.

It sounds really good when you read it in the tax regulations, but in practice, you might end up fighting with the tax authorities about this specific part of the tax law. If you're up for it, then go for it, and tell them that you read it in the tax rules they published and that you will adhere to them. But don't be surprised if you first have to pay a lot in taxes plus a fine, and then find a lawyer (whom you also have to pay) who might, or might not, be able to get back the money you paid but shouldn't have.

It's a battle like no other and you're asking for trouble. It sounds fruitfully smart when you read it, but in practice, it's different.

Of course, there is always a 50% chance that no one notices or says anything and you get away with it.

I just want to point out that tax authorities are more aggressive and inventive than ever before.