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Emigrating due to taxes? Avoid the tax trap!
The dream of a new life abroad can quickly be overshadowed by high tax demands. In particular, the exit tax in Germany poses a financial challenge for many emigrants. Find out which tax pitfalls await and how you can legally avoid them. Do you need individual advice? Contact us for a personal analysis of your situation.
The topic short and concise
The dream of a new life abroad can quickly be overshadowed by high tax demands. In particular, the exit tax in Germany poses a financial challenge for many emigrants. Find out which tax pitfalls await and how you can legally avoid them. Do you need individual advice? Contact us for a personal analysis of your situation.
The dream of a new life abroad can quickly be overshadowed by high tax demands. In particular, the exit tax in Germany poses a financial challenge for many emigrants. Find out which tax pitfalls await and how you can legally avoid them. Do you need individual advice? Contact us for a personal analysis of your situation.
The dream of a new life abroad can quickly be overshadowed by high tax demands. In particular, the exit tax in Germany poses a financial challenge for many emigrants. Find out which tax pitfalls await and how you can legally avoid them. Do you need individual advice? Contact us for a personal analysis of your situation.
Planning to emigrate and want to save on taxes? Learn how to avoid the exit tax and legally minimise your tax burden. Get informed now!
Planning to emigrate because of taxes, and looking for ways to legally minimise your tax burden? Emigrating is a major step that requires careful consideration. Not only personal and professional aspects play a role, but also the tax consequences. At GoMovin, we understand that this process can be complex. That's why we offer you comprehensive advice and support to make your international relocation as stress-free and efficient as possible. Find out now how you can dodge the exit tax and legally minimise your tax burden.
Overview of the tax consequences of emigration
Emigration has far-reaching tax implications. It is important to get acquainted early with topics such as the exit tax, the limited tax liability in Germany, and the regulations on double taxation. Early planning and seeking professional advice are essential to avoid unwanted surprises. We help you understand the complex tax aspects and make the right decisions. More information on the exit tax can be found here.
Motivation for emigration and its tax relevance
Your motivation for emigration can influence the tax assessment by the tax office. Whether you are emigrating for personal reasons or primarily because of taxes – it is important to know the differences. Being able to prove your personal reasons can positively influence your situation. We support you in preparing and documenting, to clearly outline your motives and uphold your interests. Our planning services help you consider all aspects of your emigration.
Avoid Exit Tax: How to Circumvent the Tax Trap
The exit tax can become a significant financial obstacle for emigrants. It primarily affects individuals who own shares in corporations. It is therefore crucial to address this issue early on and explore possible planning strategies. We show you how to legally avoid or at least reduce the exit tax so as not to unnecessarily burden your emigration. Find out more about the effects of the exit tax.
What is the exit tax?
The exit tax is a tax imposed on the increase in value of shares in corporations when a person moves abroad. It particularly affects individuals who hold at least a 1% stake in a corporation. Emigration is deemed to trigger a notional disposal of shares, resulting in taxation of previously unrealised capital gains. This can lead to a substantial tax burden, which should certainly be considered in advance. Our experts assist you in understanding your tax obligations.
Increased exit tax since 2022
Since 2022, there has been an increased exit tax, particularly affecting GmbH shareholders, property owners, and freelancers. The requirements have become more stringent, and the potential tax liability can be higher. This may lead to a situation where emigration becomes financially unfeasible. It is therefore advisable to inform yourself about the current regulations early on and to assess the individual impact on your situation. We offer you a comprehensive analysis of your circumstances and show you potential courses of action. The tax obligations upon exit are complex.
Basis of assessment and tax rate
The basis of assessment for the exit tax is the difference between the fair market value of the shares and the acquisition cost. Sixty percent of the gain is taxed at the individual tax rate. When moving within the EU/EEA, there is an option for instalment payments. It is important to realistically assess the fair market value of the shares and take all relevant costs into account to calculate the tax liability correctly. We support you in valuing your shares and optimising your tax burden. The costs of emigration should be meticulously calculated.
Reducing Tax Burden: Smart Strategies for Expats
There are various strategies to reduce or even completely avoid exit tax. These include, for example, transferring shares to a GmbH & Co. KG, gifting shares, or converting the company into a partnership. Which strategy is best suited for you depends on your individual situation. We analyse your situation and work together with you to develop a tailored solution to minimise your tax burden. Find out more about avoiding exit taxation.
Strategies to reduce or avoid exit tax
One way to avoid exit tax is by transferring shares to a GmbH & Co. KG. This structure can offer tax advantages, as partnerships are taxed differently from corporations. However, it is important to carefully weigh the pros and cons of this structure and assess the individual impact on your situation. We provide comprehensive advice on the possibilities and risks of this strategy. Taking money abroad requires careful planning.
Gifting shares
Another option is to gift shares before emigrating. It should be noted that gift tax may apply. It is important to consider gift tax allowances and to plan the gift in a timely manner. We support you in planning and executing the gift to optimise your tax burden. Emigration within Europe offers particular advantages.
Converting the company into a partnership
Converting the company into a partnership can also be a way to avoid exit tax. Again, there are tax structuring options that should be utilised. Alternatively, leasing assets instead of transferring them abroad can also be considered. We will outline the various options and help you find the right solution for you. Our relocation assistance supports you every step of the way.
Understanding Exit Tax: How to Avoid High Costs as a Freelancer
For freelancers and the self-employed, there are also tax aspects to consider, particularly the exit taxation. This tax becomes due when business assets are transferred abroad. Therefore, it is important to address this issue early on and explore planning options to avoid unnecessary tax payments. We provide you with comprehensive advice on ways to avoid exit taxation. Deregistering with the tax office is an important step.
What is exit taxation?
The exit taxation is a tax levied on the transfer of business assets abroad. The tax is applied to the difference between the market value and the book value. This particularly affects freelancers and the self-employed who relocate their business or parts of it abroad. It is important to realistically assess the market value of the business assets and consider all relevant costs to calculate the tax liability accurately. Our experts assist you in understanding the tax implications of emigration.
Planning options to avoid exit taxation
One way to avoid exit taxation is to transfer the business assets to a partnership. Here too, tax advantages can be achieved. Alternatively, relocating assets to a domestic branch could also be considered. We provide comprehensive advice on the possibilities and risks of these strategies. The costs of emigration can be minimised.
Leasing of assets
Another option is leasing assets instead of transferring them abroad. This avoids the transfer, and no exit taxes are incurred. Lease payments can be claimed for tax purposes. We present you with the various options and help you find the right solution for you. Our relocation assistance supports you every step of the way.
Tax obligations after emigration: How to avoid double taxation
Even after emigration, a tax obligation in Germany may remain. This is particularly the case if you continue to earn income from Germany. Therefore, it is important to be informed about the rules on limited tax liability and double taxation. We help you fulfil your tax obligations and avoid double taxation. Learn more about the avoidance of double taxation.
Limited Tax Liability
Even after emigration, you may be subject to limited tax liability in Germany if you continue to earn income from Germany. This includes, for example, income from renting and leasing, capital investments or self-employment. It is important to correctly tax this income and retain all relevant documents. We support you in preparing your tax return and complying with your tax obligations. Taking money abroad should be considered from a tax perspective.
Extended Limited Tax Liability
The extended limited tax liability is aimed at preventing tax avoidance in low tax countries. It applies if you move to a country with significantly lower tax rates while maintaining substantial economic interests in Germany. The requirements are complex, and it is important to seek comprehensive advice. We analyse your situation and check whether the extended limited tax liability applies to you. Our planning services help you consider all aspects.
Importance of Residency and Habitual Abode
Residency and habitual abode play a crucial role in determining your tax obligation. The 183-day rule states that you are subject to tax in Germany if you spend more than 183 days a year in the country. Simply deregistering your residence is not enough to end your tax obligation. It is important to carefully document your stays in Germany and consider the tax implications. Emigration within Europe simplifies many processes.
Avoiding double taxation: How to benefit from DTA advantages
Double taxation can become a significant financial burden for expatriates. Fortunately, there are Double Taxation Agreements (DTAs) designed to prevent this. It's important to understand how DTAs work and to take advantage of the benefits they offer. We help you to avoid double taxation and optimise your tax burden. Learn about double taxation despite emigration.
What is Double Taxation?
Double taxation means that your income is taxed both at home and abroad. This can particularly be the case when you earn income from multiple countries. To avoid this, there are Double Taxation Agreements (DTAs) in place between Germany and many other countries. These agreements determine which country is entitled to tax the income and how double taxation can be avoided. Our experts assist you in avoiding double taxation.
How Double Taxation Agreements Work
Double Taxation Agreements (DTAs) are based on different principles, such as the principle of the country of residence and the source country principle. The country of residence principle states that income is taxed in the country where you reside. The source country principle states that income is taxed in the country where it originates. DTAs clarify which principle applies in which situation. We provide comprehensive advice on the regulations of DTAs and help you optimise your tax burden. Taking funds abroad can have tax implications.
The Importance of DTAs for Expatriates
As an expatriate, it is crucial to be informed about the Double Taxation Agreement (DTA) with your destination country. Determine where you are taxable and how foreign taxes are credited. We assist you in resolving these issues and help you minimise your tax burden. Our relocation assistance supports you at every step.
Optimising Inheritance Tax: How to Plan Your Assets When Emigrating
Inheritance and gift taxes also play a role when emigrating. It is important to be informed about tax obligations in Germany and abroad and to consider the impact of emigration on inheritance and gift taxes. We provide comprehensive advice on these topics and help you optimise your wealth planning. Find out more about the tax aspects of moving abroad.
Inheritance and Gift Tax Liability in Germany
In Germany, there is unlimited tax liability for domestic connections and limited tax liability for overseas connections. For German citizens abroad, a five-year rule applies. This means that you can continue to be liable for inheritance and gift tax in Germany for up to five years after your emigration. It is important to be aware of this rule and adjust your wealth planning accordingly. Our experts help you understand the tax implications of emigration.
Impact of Emigration on Inheritance and Gift Tax
Emigration impacts the handling of inheritances and gifts. It is important to consider the Double Taxation Agreement (DTA) in the event of inheritance and to seek tax advice prior to inheritance or gifting. We support you in planning your wealth transfer and help you minimise your tax burden. Taking money abroad requires careful planning.
Optimize your tax return: Master the year of emigration
Even in the year of emigration, you are obliged to submit a tax return. You must declare both your German and foreign income. It is important to gather all necessary documents and adhere to deadlines. We assist you in preparing your tax return and help you make the most of all tax advantages. Learn about the obligations in the year of emigration.
Obligation to Submit a Tax Return
In the year of emigration, you are required to submit a tax return. You must declare both your German and your foreign income. The progression effect can lead to your foreign income influencing the tax rate on your German income. However, there are exceptions, for instance, for foreign capital income. Our experts help you understand the tax implications of emigration.
Necessary Documents and Deadlines
For the tax return in the year of emigration, you will need various documents, such as income records, proof of expenses, and evidence of your foreign income. It is important to observe the deadlines for submitting the tax return. You can seek support from a tax advisor or an income tax assistance association. We offer comprehensive advice and support in preparing your tax return. Taking money abroad should be considered from a tax perspective.
Special Features of the Tax Return in the Year of Emigration
There are some special features to consider in the tax return for the year of emigration. For example, you must specify the date of departure and provide proof of your residence abroad. Additionally, you need to provide information about your foreign income. We assist you in considering all special features and completing your tax return correctly. Our relocation assistance supports you in all steps.
Successfully planning emigration: Don't forget the tax aspects
Tax considerations are a crucial part of emigration planning. It is important to address issues such as the exit tax, unrealised capital gains tax, limited tax liability, double taxation agreements (DTA), and inheritance tax early on. Early planning and seeking professional advice are essential. Here's a summary for you:
Key Benefits of [Topic]
Here are some of the most important points you should consider:
Exit tax: Avoid high tax payments through early planning and the use of structuring options.
Double tax agreements (DTA): Familiarise yourself with the regulations in your destination country to avoid double taxation.
Tax return: Take note of the specific requirements in the year of emigration and submit all necessary documents.
Recommendations for Emigrants
We recommend starting your emigration planning early and seeking professional advice. Consider the tax implications when choosing a destination country and use all available structuring options to minimise your tax burden. We at GoMovin are happy to assist you. Contact us today for personalised advice and let us plan your emigration together. We offer comprehensive support, from initial consultation to the successful execution of your emigration. Contact us now.
Further useful links
The Bundesministerium der Finanzen provides information on exit taxation and its current regulations.
Wikipedia offers a general overview of double taxation agreements.
FAQ
What tax aspects must I consider when emigrating?
When emigrating, you need to consider the exit tax, the unstranding tax, the limited tax liability in Germany, and the rules on double taxation. Early planning is crucial.
What is the exit tax and how can I avoid it?
The exit tax applies if you own shares in corporations and move abroad. You can avoid or reduce it through restructuring (e.g. GmbH & Co. KG), gifts, or conversion into a partnership.
What is the unstranding tax and does it affect me as a self-employed person?
The unstranding tax affects self-employed individuals who relocate business assets abroad. You can avoid this by transferring to a partnership or leasing assets.
Will I remain taxable in Germany after emigrating?
Even after emigrating, you may be limitedly tax liable in Germany if you continue to earn income from Germany. The extended limited tax liability can apply if you move to a low-tax country and still have significant economic interests in Germany.
How do I avoid double taxation after emigrating?
Double taxation agreements (DTA) between Germany and your destination country determine which country can tax your income. Find out about the DTA with your destination country.
How will emigration affect inheritance and gift tax?
For German citizens abroad, a five-year rule applies. Within five years after your emigration, you may still be liable for inheritance and gift tax in Germany. Early asset planning is advisable.
What are my obligations in the year I emigrate regarding tax returns?
In the year of emigration, you must file a tax return declaring both your German and foreign income. The progression effect can affect your tax rate.
Does my motivation for emigrating play a role in tax assessment?
Yes, motivation can play a role. If you can prove personal reasons for emigrating, this can positively influence your situation. Carefully document your reasons.
