# Long-term mission to Germany



## DPF

Hello,
Actually I am working for one big Russian machinery manufacturer (I am originally Russian), a couple of days ago my employer offered me an abroad assignment in Germany (Berlin) for almost a year, total compensation will be about 2300 Euro/month + accommodation (so I will not have to pay for the apartment ). I would be grateful for your suggestions regarding whether that income will be sufficient to live there in three heads - me, my wife and my little kid of 1 year? Thanks in advance for any information.


----------



## Nononymous

It really depends. Is that income before or after deductions for income tax, health insurance, and so on? Does the accommodation include heat, electricity, internet, and so on?

If it's your after-tax income and the you don't pay much for the apartment, you'd be comfortable, though not rich. Otherwise you'd survive but might not have much fun.


----------



## DPF

Nononymous said:


> It really depends. Is that income before or after deductions for income tax, health insurance, and so on? Does the accommodation include heat, electricity, internet, and so on?
> If it's your after-tax income and the you don't pay much for the apartment, you'd be comfortable, though not rich. Otherwise you'd survive but might not have much fun.


Thank you very much! It's the after-tax income, health insurance will be separately paid by employer and the accommodation payment covers all costs that you mentioned, so now I hope not only to survive


----------



## James3214

It's enough to live on in Berlin if your accommodation costs are paid. But be careful, the apartment would also be considered as taxable, so best get a good Berlin based tax adviser or a good accountant who has probably advised in many similar cases.


----------



## DPF

James3214 said:


> It's enough to live on in Berlin if your accommodation costs are paid. But be careful, the apartment would also be considered as taxable, so best get a good Berlin based tax adviser or a good accountant who has probably advised in many similar cases.


Thank you for reply! You mean that in Germany one who rent an apartment must also pay a tax to the state for that? I hope that is a joke


----------



## ALKB

DPF said:


> Thank you for reply! You mean that in Germany one who rent an apartment must also pay a tax to the state for that? I hope that is a joke


No, that would be the UK 

Jokes aside, it means that even though your employer would pay the cost and you would not actually get any money, it would be seen as an income of sorts as you would otherwise have to pay for renting a flat = a non monetary benefit that has a certain worth.


So you would have to declare this when filing your tax.

EDIT: To make this more understandable: When i was still working in hotel management, I received free meals during work hours. I did not have to pay for this but my employer assigned this a certain value (as I did not have to bring food from home, which I would have to pay for) and it was mentioned on my tax card and possibly my pay slips. I didn't pay for the food but I paid tax on the amount of money I would have had to pay for the food.


----------



## James3214

DPF said:


> Thank you for reply! You mean that in Germany one who rent an apartment must also pay a tax to the state for that? I hope that is a joke


Well, as AKLB mentions it is considered as a 'monetary benefit' so you will have to pay some tax on it. I think it is done on the m2 /square meter. 
Taxes are not treated as a joke here in Germany. Unless you opt out of it you can also end up paying 'church tax' which will also entitle you to be buried in the local graveyard. You will be okay with the salary but be careful with the tax issues. You might end up with a surprise!


----------



## Nononymous

Yes, it would be safest to check with your employer to see that the free apartment is already factored into your tax calculation, so that you aren't presented with a bill at the end of the year.


----------



## DPF

Nononymous said:


> Yes, it would be safest to check with your employer to see that the free apartment is already factored into your tax calculation, so that you aren't presented with a bill at the end of the year.


During the mission, even being physically located in Germany, from the legal point of view I will remain employed by a Russian legal entity and in such quality I will continue to remain a subject of the Russian taxation, hence in that case the bilateral agreement between RF and Germany on the double taxation avoidance should be applicable. I mean that in RF I will pay 13% of tax on all the incomes originating from my employer and that should be sufficient. Am I right in that my understanding of the situation?


----------



## James3214

I think you are wrong in your understanding. Indeed there is a double tax agreement between Germany and Russia but you are earning the money in Germany and it will be subject to German income tax rates which are considerably higher than the RF 13% you mention. You won't need to pay the 13% in Russia on your earned income though.
There are websites such as this one that may help calculate how much tax you must pay Steuerrechner 2015 Steuer Rechner Steuerberechnung 2014

People don't come to Germany to get rich. They normally come for the experience and the quality of life.


----------



## Nononymous

I would be a bit careful here. If what you're doing is considered some sort of extended business trip then it might be okay to continue receiving wages paid to your Russian account, with Russian taxes deducted. If not, you would be dealing with German taxes. If your employer has done this before, successfully, then it's probably okay. If you're the first, I might ask a few more questions.


----------

