# Double taxation



## john774 (Feb 9, 2020)

Hi everyone

I have South African/German dual citizenship. I pretty much resided for most of my life in South Africa. I own a business here in South Africa and am planning to move back to Germany in 2021.

For now I am not planning to emigrate financially. Hence, my assets won't be sold and my business will be kept operational in South Africa, as I derive my income from it. 

I know there is a double taxation treaty between South Africa and Germany, however I am very confused when absorbing the information and it is not very clear to me if and how much income tax I would pay in Germany. 

The scenario would be as following. I would be living in Germany, but derive my income purely from my business in South Africa. I would not be working for any business locally in Germany. By doing this I would be taxed on my income here in South Africa. To build up my credit record in Germany (Bonität) I would assume I'd have to open up a German bank account and pay my salary into it. 

Would I be double taxed by doing so? Does anyone have pointers for me?

Thanks.

Sent from my Pixel 4 XL using Tapatalk


----------



## Bevdeforges (Nov 16, 2007)

There should be a tax treaty between Germany and South Africa that will indicate how and to which government your taxes are due. 

You also need to check into the specific requirements of each country for "tax residence." Generally speaking, you usually must declare your worldwide income to the country in which you are considered "tax resident." That can be determined by where you physically spend the most time, where you have your regular home and/or where you have your financial centers of interest (such as sources of income, banking relations, investments, etc.).

If you continue to draw a salary from your SA businesses, you will have to pay the German social insurances and payroll taxes (as you are considered to be working in whatever country you are physically located in while doing whatever it is you do to earn your salary) and the company will be expected to pay the employer's portion of those charges.

It may be a good idea to consult an attorney who can help you structure your business interests in a manner that allows the business to continue in SA and pay its own taxes, while paying out your salary or dividends while you are living in Germany.


----------

