ACEE – Meeting Berlin 27. May 2011 ACEE – Meeting Berlin 27. May 2011 Overview about the Overview about the German Taxation German Taxation Income from Income from Trade or Business Trade or Business and and Self-Employment Self-Employment WP/StB Dipl.-Kfm. Hans-Dieter Vietmeier WP/StB Dipl.-Kfm. Hans-Dieter Vietmeier
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ACEE – Meeting Berlin 27. May 2011 Overview about the German Taxation Income from Trade or Business andSelf-Employment WP/StB Dipl.-Kfm. Hans-Dieter Vietmeier.
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ACEE – Meeting Berlin 27. May 2011ACEE – Meeting Berlin 27. May 2011
Overview about theOverview about theGerman TaxationGerman Taxation
Income fromIncome fromTrade or BusinessTrade or Business
ACEE – Meeting Berlin 27. May 2011ACEE – Meeting Berlin 27. May 2011
Exemption: capital gains on sales of Exemption: capital gains on sales of a shares of a corporationa shares of a corporation
Proportion: > 1% within the last 5 y. Proportion: > 1% within the last 5 y. Taxpayer > 55 years old (or disabled)Taxpayer > 55 years old (or disabled) Exemption (benefit)Exemption (benefit) 9.060 €9.060 €
- reduces when > 36.100 €- reduces when > 36.100 € Reduced tax rate: 56% of normal Reduced tax rate: 56% of normal
– Business/trade Business/trade 15 years15 years– Self Employ. (practice) 3-5 y. / 6-10 y.Self Employ. (practice) 3-5 y. / 6-10 y.
Investment deduction for SME (net-Investment deduction for SME (net-capital < 235.000): capital < 235.000): – Investment deduction amount for the Investment deduction amount for the
ACEE – Meeting Berlin 27. May 2011ACEE – Meeting Berlin 27. May 2011
Example: SME buys a mashine (2.y.)Example: SME buys a mashine (2.y.)Price / valuePrice / value 500.000 500.0001. Year1. Year (40%)(40%) -200.000-200.000
300.000300.0002. Year depr.sp.20%2. Year depr.sp.20%- 60.000- 60.000 depreciation, normal depreciation, normal - 30.000- 30.000 book value (42%)book value (42%) 210.000210.000 depreciation over all : depreciation over all : 58%58%
ACEE – Meeting Berlin 27. May 2011ACEE – Meeting Berlin 27. May 2011
Exemption (?): loss deductionExemption (?): loss deduction Losses on trade or business (self.E.) Losses on trade or business (self.E.)
equalize other income 100%equalize other income 100% Loss carryback: deduction of negative Loss carryback: deduction of negative
income in Y1 adjustes gross income of income in Y1 adjustes gross income of previous Y0 (optional) – max. 511.500 previous Y0 (optional) – max. 511.500 (double 1.023.000 for couples)(double 1.023.000 for couples)
Carryforward: not time-limit Carryforward: not time-limit – Losses< 1 Mio: 100% / > 1 Mio. only 60%Losses< 1 Mio: 100% / > 1 Mio. only 60%
ACEE – Meeting Berlin 27. May 2011ACEE – Meeting Berlin 27. May 2011
Exemptions (?): expenses for cars, Exemptions (?): expenses for cars, travel etctravel etc
CarsCars > 50% business use > 50% business use „asset“ „asset“
Expenses: no real limit, all costs incl. Expenses: no real limit, all costs incl. depreciation (6 y. for new cars)depreciation (6 y. for new cars)
correction: personal usecorrection: personal use
a) 1% original list-price per month a) 1% original list-price per month oror
b) documentary evidence (properly b) documentary evidence (properly kept log book – real percentage of kept log book – real percentage of relation)relation)
ACEE – Meeting Berlin 27. May 2011ACEE – Meeting Berlin 27. May 2011
Reimbursement business use by own Reimbursement business use by own car car – Documented costs (above)Documented costs (above) x,xx €/Kmx,xx €/Km– Or flat rateOr flat rate 0,30 €/Km0,30 €/Km
ACEE – Meeting Berlin 27. May 2011ACEE – Meeting Berlin 27. May 2011
Special pension allowanceSpecial pension allowance– SpousesSpouses 256.000256.000– Children different age 52.000 – 10.300Children different age 52.000 – 10.300
ACEE – Meeting Berlin 27. May 2011ACEE – Meeting Berlin 27. May 2011
Conclusion: Germany is no tax haven,Conclusion: Germany is no tax haven,but „reasonable tax conditions“but „reasonable tax conditions“
work hard in reasonable German work hard in reasonable German economic conditions,economic conditions,
leave business profits in your cash box – leave business profits in your cash box – stay „poor“ personally,stay „poor“ personally,
be glad driving a beautiful - tax deductible be glad driving a beautiful - tax deductible -business car (so you look „rich“),-business car (so you look „rich“),
leave a real rich widow (because you leave a real rich widow (because you worked too hard!),worked too hard!),
so that SHE feels in Germany‘s „tax so that SHE feels in Germany‘s „tax haven“ haven“