Tax on savings interest in Germany

B

BlueHorseShoe

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If I am Irish tax resident and lets say I have 2 savings accounts that are actually physically located in Germany

1 earns 1000 the other 1200 in savings interest

Naturally I have to pay DIRT in Ireland

As a non tax resident of Germany do I have to file a tax return and pay or offset a portion of the tax in Germany as well - I noticed Germany tax laws for residents are 1000 euro tax free after which you pay 21% plus another tax making it around 26%

Do I pay 33% on 2200 in Ireland and use that as a tax credit against 26% of 1200 in Germany effectively zeroing it - is a tax return in Germany still even needed ?
 
You can only use 15% of the German tax as a credit against your Irish tax liability.

You can reclaim the rest (11%) from the German tax authorities
 
BlueHorseShoe said:
If I am Irish tax resident and lets say I have 2 savings accounts that are actually physically located in Germany
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Are they covered by the German deposit guarantee scheme?

Sorry for the pedantry but these days an account is often no more than a ledger entry on a server so it’s the protection of the DGS that is the deciding factor for location!
 
jpd said:
You can only use 15% of the German tax as a credit against your Irish tax liability.

You can reclaim the rest (11%) from the German tax authorities
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Not sure how that works
Dr Strangelove said:
Sorry for the pedantry but these days an account is often no more than a ledger entry on a server so it’s the protection of the DGS that is the deciding factor for location
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Dr Strangelove said:
Are they covered by the German deposit guarantee scheme?

Sorry for the pedantry but these days an account is often no more than a ledger entry on a server so it’s the protection of the DGS that is the deciding factor for location!
Click to expand...

Dr Strangelove said:
Are they covered by the German deposit guarantee scheme?

Sorry for the pedantry but these days an account is often no more than a ledger entry on a server so it’s the protection of the DGS that is the deciding factor for location!
Click to expand...

Dr Strangelove said:
Are they covered by the German deposit guarantee scheme?

Sorry for the pedantry but these days an account is often no more than a ledger entry on a server so it’s the protection of the DGS that is the deciding factor for location!
Click to expand...

Dr Strangelove said:
Are they covered by the German deposit guarantee scheme?

Sorry for the pedantry but these days an account is often no more than a ledger entry on a server so it’s the protection of the DGS that is the deciding factor for location!
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Citibank Europe is covered by Irish Central Bank - JP Morgan by German Central bank
S class said:
Did you apply for an exemption, or was this the normal set up ?
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No normal setup they pay gross for non-residents of Germany
 
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I have deposits in Trade Republic. I don't think you have to declare anything to the German revenue. German tax residents do get a 1000 euro exemption.
 
I have deposits with two German Banks. I told them that I am an Irish resident and asked to be exempt from German deposit interest tax. So I pay no tax in Germany on my deposit interest and pay the full DIRT in Ireland. You should let the German bank know that you are not tax resident in Germany and ask for a Steuerbefreiung.
 
Dont you have to ask that from the German tax authorities - both banks I have pay gross of tax and do not withhold tax as standard for non-residents
 
Non-Residents should not pay taxes on German Savings to the German Tax Authorities if they are not taxable in Germany for any other reason (like having property etc.).

If your Bank is deducting Kapitalertragssteuer than you can send them a "Erklärung für Zwecke der Abstandnahme vom Kapitalertragsteuerabzug" or Declaration that they should not deduct taxes.

You than are required to inform Revenue as part of your tax return about the amount of interest you received and will pay DIRT (and other taxes as required).

But in case of the OP, as both banks are paying gross and do not withhold there is nothing to be done with those banks or the German Tax Authorities, all that is required is the appropriate Irish Tax Return.

There is nothing to file with the German Authorities and the "Freistellungsauftrag" to get the appropriate tax exemption in is not valid if you are not a tax resident of Germany. Those are only for German Tax Residents with a German TIN. That allowance will not carry over to your Irish Taxes.
 
DublinTexas said:
Non-Residents should not pay taxes on German Savings to the German Tax Authorities if they are not taxable in Germany for any other reason (like having property etc.).

If your Bank is deducting Kapitalertragssteuer than you can send them a "Erklärung für Zwecke der Abstandnahme vom Kapitalertragsteuerabzug" or Declaration that they should not deduct taxes.

You than are required to inform Revenue as part of your tax return about the amount of interest you received and will pay DIRT (and other taxes as required).

But in case of the OP, as both banks are paying gross and do not withhold there is nothing to be done with those banks or the German Tax Authorities, all that is required is the appropriate Irish Tax Return.

There is nothing to file with the German Authorities and the "Freistellungsauftrag" to get the appropriate tax exemption in is not valid if you are not a tax resident of Germany. Those are only for German Tax Residents with a German TIN. That allowance will not carry over to your Irish Taxes.
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Thanks this is great explanation - would this be put down as “EU interest” on the Irish tax form ? actually I wonder if you could clarify other questions I have as you seem very knowledgeable
 
BlueHorseShoe said:
Thanks this is great explanation - would this be put down as “EU interest” on the Irish tax form ? actually I wonder if you could clarify other questions I have as you seem very knowledgeable
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I only know this because I went through this with DKB who were not set up to automatically stop taking Kapitalertragssteuer with a foreign address and required me to fill out paperwork.

And as to declaring it with Revenue, yes, it's under "EU interest". Revenue will then tell you how much you need to pay. You must be sure to declare it on time as otherwise you will get hit with 40% tax rather than 33%.
 
Regarding Revenue, make sure you select "EU DEPOSIT Interest". Do NOT select "EU Other Interest". They are AFAIR two different categories and the "other" interest as a different/higher tax rate.

As DublinTexas says, you don't need to inform the German tax authorities to get tax free interest. You just inform your bank. They usually have a standard form where you tick the box to say that you are not a German tax resident.

E.g. this is what I had to fill in:
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