German Property Taxation

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EW-H

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I recently acquired an apartment in Germany and am thinking or renting it.

I do not know how to go about paying tax on any income. Does anyone know if there is a tax treaty between Germany and Ireland whereby I can make a tax return here rather than go through the complicated German system?

I also suspect there may be some non-resident landlord tax that I should pay to the German tax authorities. If I pay this tax to the Germans, and if there is a tax treaty between Germany and Ireland, I should not also have to pay the Irish Revenue tax on the same income, right?

Can anyone help or tell me where I might seek advice on this?
 
There is a tax treaty between Germany and Ireland so any tax paid on the same income will earn credits in the other country. You will be liable for german tax I should imagine but should definitely use a Steuerberater (at least for your first tax return to give you an idea of what you can write off) as there are a multitude of things you can write off against tax in germany, even many "PAYE" employees use one in fact. You will get a receipt from the german Finanzamt for tax paid and can use that with revenue to avoid paying tax twice, you may be liable for more tax in ireland of course, but will get credit for tax already paid to the germans. Where is your apartment? There's a forum for english speakers in germany with some very well informed posters in the financial sections so it would be well worth posing the question there: www.toytowngermany.com . I have an apartment here too, but I live in mine so don@t know anything apart from the Grundsteuer (property tax, the Finanzamt probably already sent you correspondence about paying that).
 
I submitted returns via my accountant in Ireland for 2007 and 2008 on property that I own in Germany. 2007 was a loss and 2008 was a profit. The returns were combined with my Med 1 form so I ended up with money back from the Revenue in both years.
Should I have made a tax return in Germany first, then in Ireland?
 
Return has to be done in Germany by May 31st. Any tax paid there can then be deducted from the Irish liability in October.
Check the Revenue website. It gives faily straightforward info.

OP even if you earn income this year you will not have to pay tax on it till next year so you've plenty of time to get sorted.

bKelly95. I think you could find that the German tax authorities are entitled to come after you. Tax if any should have been paid there first. Even if there is no profit you still have to do a return. Should get your accountant to check this out. Sometimes fines will apply if your late.
 
Allowable Expenses - Berlin Property

I am sorting out my rental income tax for 2009 on a property that I bought in December 2007. I have just noticed that my German Tax Return for 2008 did not show any of the incurred costs for purchasing the property in 2007, even though the accountant in Berlin requested these to be sent to him last year. Does anyone know if any of the costs associated with purchasing an apartment in Germany are an allowable expense against income tax?
I only paid 15% tax in Germany and so I will end up paying another chunk of tax in Ireland. I have no idea why it was so low, but I suppose it doesn't make any difference as I will have to pay the difference in Ireland.
 
Your purchase expenses eg EA fees, Lawyers etc normally get deducted from your CGT when you sell, assuming German tax laws are the same as here.

I'm not 100% certain but I think that if you hold the property for 10yrs before selling you are exempt from CGT in Germany anyway.
 
Thanks for the info. I have realised that the tax was low in Germany as I was allowed to write off a fair amount due to annual depreciation. Unfortunately, this is not allowable in Ireland and so I ended up have to pay a fair amount of tax over here.
 
German Tax

You must first declare & pay German Tax on German Rents received (after deduction of costs including an annual building depreciation & interest on a loan taken out to purchase the property). Therefore the German tax payable can often be lower than the tax payable in Ireland. There is a double taxation agreement between Ireland & Germany which means that German tax paid on rental income (or capital gains) can be offset against Irish tax payable on the same income. The deadline for filing your German tax return is 31 May in time to receive back confirmation of tax paid before you must file your Irish tax return (31 October).

DG International Tax, an Irish registered tax & accounting firm provide German Tax filing services.
 
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