The Expat-Team

Finding the best way to relocate to Germany is important and seeking early advice will save time, cost and avoid difficulties later.

Every person who wants to relocate to another country has to investigate the legal and tax environment of the new country of residence and this applies to anyone wanting to move to Germany. The reasons for relocating to Germany vary. Many people come to Germany to work, either as an employee or as a self-employed person. Others come to Germany for private, family or sometimes for political reasons.

The tax and customs regulations and legal requirements in Germany are complex and demanding. Therefore a team of experts, with differing specialisms, is required to cover all the circumstances and to meet individual needs. We have formed this team – The Expat-Team.

Peter Scheller

German tax adviser, Master of International Taxation from Hamburg (www.scheller-international.com)

Peter is the expert for international taxation and gives advice on tax and social security issues in Germany. He is also a specialist in Double Taxation Treaties or Social Security Treaties as well as in customs law, VAT and excise taxes.

There are various special topics to be considered in this field before finding the optimum solution:

• If the employer has no permanent establishment or subsidiary in Germany he or she is not considered to be a “German employer”. Therefore he or she is not obliged to withhold any taxes on salaries or fringe benefits. The employee will therefore have to file income tax returns and pay taxes in four quarterly instalments.
• Liability for social security contributions in Germany are in general for employees only. Self-employed persons or majority shareholders of companies are in general not liable for social security contributions.
• Special tax problems can occur for shareholders of foreign companies. Often a shareholder who continues to work for his or her company can constitute a permanent establishment for the company in Germany. This results in tax liabilities of the company in Germany.
• Complications to consider are the regulations for pensions and other old-age benefits in Germany.

Finding the best way to relocate to Germany is important and seeking early advice will save time, cost and avoid difficulties later.

Alexander Wangerowski

German tax adviser from Bielefeld (www.aw-stb.de)

Alex and his team is specialized in filing all kinds of tax and social security declarations.

One special issue has to be considered. It is important to note the fact that social security contributions are not taxed in Germany. The contributions are not collected by the tax authorities but by social security agencies and certified health insurance entities. As a consequence separate declarations have to be filed and handed in to these agencies. This means that the employer has to do payroll accounting, produce pay-slips, file social security declarations and pay the employer’s and employee’s parts of the contributions. The employer has to store all relevant documents. This leads to the unusual situation that, for example, an US employer cannot simply file income tax returns for salaries and wages (see above) but also has to follow all relevant obligations in regard to social security contributions. If the employer does not perform accordingly the employee has to fulfill these respective obligations.

Alex and his team can file the following declarations:

• Income tax returns for employees, self-employed persons or shareholders of companies
• Value added tax returns for self-employed persons and freelancers
• Social security declarations for German and foreign employers
• Accountancy and bookkeeping for companies and self-employed persons

Alex and his team also communicate with the German tax authorities if required.

Susanne Zaczek

German customs specialist from Kiel (www.zoll-service-kiel.de)

Susanne is specialized in all aspects of customs and excise taxes. She deals with German customs authorities on a daily basis.

She can advise on the customs and excise tax issues if expatriates from non-EU member states relocate to Germany. Special issues to be aware of here are:

• Relocation goods are in general free of customs duties and import-VAT. However, special regulations have to be followed in order to secure the exemption.
• Special regulations apply for cars and other transport vehicles. Expatriates have also to pay the German motor vehicle tax if the cars or vehicles arrive in Germany.
• The importation of goods such as alcohol or tobacco products are not free of customs duties, VAT and excise taxes if certain minimal allowances are exceeded.

Susanne supports her clients in day-to-day issues and in auditing for customs authorities.

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