# US retirement income in Germany/ Taxable by Germany?



## ScottCM

I am a US citizen married to a German. When I retire to Germany, will my Social Security income be taxable by Finanzamt?


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## beppi

Having a residence in Germany (even if it's only second or third residence) automatically makes one fully tax-liable in Germany, with the entire world income.
This basic rule is overridden in certain parts by tax-treaties between Germany and certain countries. Read the one Germany has with USA, and, if needed, get a good international tax consultant's advice to actually understand it!


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## Bevdeforges

Germany - Tax Treaty Documents

Generally the Technical Explanations are a bit more readable than the treaty itself. However, the general pattern to the US-[your country here] treaties is that you pay tax on US Social Security to the US. See IRS Publication 915 for the details, however a quick scan reveals that Germany is one of the lucky countries where you do NOT pay tax on your US Social Security to the IRS. (Usually means you'll pay any taxes on it as part of your German tax returns.)
Cheers,
Bev


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## ScottCM

*Vielen Dank!*

Beppi and Bev,
Thank you very much for your replies. I am so glad I found you and this community!
It confirms my limited knowledge of Publication 915, but I'll have to study how it is that Finanzamt will obtain that information regards income from US sources. Other than when I volunteer it, of course.
I have other income also, some of which is specifically non-taxable under US Law (VA Benefits). Any ideas on Deutschland's position on that?


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## Bevdeforges

Basically, on most international tax matters, the IRS has to rely on the information you volunteer, as does the German finanzamt. They do exchange information, though generally this is in cases where there are "issues" on both sides of the deal. And with the FATCA regulations, they will be exchanging banking information, including balances going in and out of your bank accounts on both sides of the world. Now, how much the Finanzamt does with the information they get from the US is anyone's guess.
Cheers,
Bev


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## ScottCM

*An interesting world ......*

......... we live in, isn't it? FATCA is going to be such a potentially large expense to non-US banks, especially the smaller ones. Hopefully it will achieve it's goals in as painless a manner as possible.
Once again, Thank you!


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## beppi

Even if the German Finanzamt does not get all the information automatically: You are required to submit a yearly tax declaration including your entire wold income (incl. the non-taxable parts, for which you then apply for an exemption), and not being completely truthful in this is a criminal offense that carries stiff fines. Since it is basically impossible for a non-native speaker to complete the declaration correctly, you'll have to get a good tax advisor anyway.


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## ScottCM

*Thank you!*

For that information....... I remember some contractors (selbstandig? Correct?) who had issues of some kind, when I was there last (about 10 years ago). Best to stay away from that problem. We are aiming for a relaxed time after retirement, and I know that issues with finanzamt or similar organizations could decrease the relaxation factor substantially.


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## Bevdeforges

ScottCM said:


> ......... we live in, isn't it? FATCA is going to be such a potentially large expense to non-US banks, especially the smaller ones. Hopefully it will achieve it's goals in as painless a manner as possible.
> Once again, Thank you!


Germany is probably one of the more "literal minded" of the countries in the matter of FATCA enforcement, particularly the banks (because they don't want to lose their rights to do business in the US).

You may want to take a look at the actual bi-lateral agreement on FATCA, however, as in most cases the smaller banks (i.e. those that do business only within Germany) are specifically exempted from the reporting and there are other exemptions.

The power of the IRS to enforce regulations to the penny is severely limited outside the US, too, so generally a "good faith" tax return is good enough. (And there is an IRS office in Frankfurt if you have questions.) The German forms are a bit awe-inspiring the first couple times around, even if you have a reasonable level of German - but there is a big industry in books explaining how to do your own tax forms. And the services of a Steuerberater are at fixed rates that are a function of your income level. (Or they were when i was living there.)
Cheers,
Bev


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## ScottCM

*Another question or 2, please?*

Hi,
(1) Looking for tax tables by income level for Germany Yr 2014. Any one know where I could find them?
(2) Is a US Veterans Disability payment considered taxable by Germany as part of annual income? In the US it is not. Wondering about Germany.

Thank you in advance.


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## Bevdeforges

You probably need to take a look at the actual tax treaty between the US and Germany - but generally speaking most "government pensions" are arranged to be taxable only by the country that is paying the pension. (But there are exceptions - so be sure to check the applicable tax treaty.)

Germany - Tax Treaty Documents

Not real "racy" reading material, but probably the best way to know "for sure."

If you speak German, this is probably the best site to check for tax tables SIC-Portal: Internetauftritt des Bundeszentralamtes für Steuern - Steuersatz / Tarif
Cheers,
Bev


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## beppi

ScottCM said:


> (1) Looking for tax tables by income level for Germany Yr 2014. Any one know where I could find them?


Brutto Netto Rechner 2014 2013 Gehaltsrechner 2014 2013 Lohnrechner 2014 2013 Gehalt gives you an indication of your take-home pay, but the exact figure depends on too many individual factors to be represented in any table or calculator.



ScottCM said:


> (2) Is a US Veterans Disability payment considered taxable by Germany as part of annual income? In the US it is not. Wondering about Germany.


Most probably yes, but you should check this with a good German tax consultant (you'll need one anyway after your relocation, as the system is practically not manageable for a non-native speaker).


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## ScottCM

*Thanks again*

Bev and Beppi,

Once again, I thank you for your input. I am trying to do a straight comparison table for 3 countries, Germany being one, that makes the decisions of where to go easier.
Can't really calculate the intangibles (where the kids live, etc), but it does help.

Take care,


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## Nignoy

If your US disability pension is paid into a german bank,on your bank statement will be an entry telling you to register it with the finananzamt, I receive a british war disablement pension, which is taxed at source ,but I am still liable for german tax payments on the pension


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## ScottCM

*Thanks for the info!*

Thank you Nignoy,
Appreciate the info.
All my retirement payment deposits will be made to a US Bank, but the US does not tax the veterans disability payment.
Not wanting to get on Finanzamt's "bad" list, I want to make sure that I let them know what's going on, when it is required.
Looks like I'll be arranging a tax adviser as soon as I get there.


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## Nignoy

ScottCM said:


> Thank you Nignoy,
> Appreciate the info.
> All my retirement payment deposits will be made to a US Bank, but the US does not tax the veterans disability payment.
> Not wanting to get on Finanzamt's "bad" list, I want to make sure that I let them know what's going on, when it is required.
> Looks like I'll be arranging a tax adviser as soon as I get there.


no problem, you will find that most of the german burocrats speak excellent English and are only to willing to help and explain things, not abit like the demigods in Australia , who have created a fine art out of ruining peoples lives


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