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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4191
Experience:  FCCA FCMA CGMA ACIS
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I'm a UK citizen, but lived in Germany from 2010 to Nov 2013

Customer Question

I'm a UK citizen, but lived in Germany from 2010 to Nov 2013 because of my husband's work. I did some English teaching there freelance, few difference organisations. I've continued to do a small amount of online teaching of them after coming back while gradually getting back to work in the UK. I've been told I still had to file a German tax form , because of German source income. I'm liable on foreign source income in the UK, so I don't get this. I can see maybe if I was employed by them, but I'm freelance, so why is it any different than if I was selling to them online? Is somebody just confused and thinks I lived in Germany of 2014, or is there some kind of transition period?
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
, I'm Keith and happy to help you with your question. I do not see any fundamental problem here, nor anything sinister in the German taxman's request. Expatica has the following simple information:
'All German residents are liable to income tax on their worldwide income and assets. Non-residents are subject to German income tax in respect of German-source income.'
The German tax year runs 1 January to 31 December so their tax system may be unaware of your quitting their shores in November 2013 and have required you to file. This must be achieved by 31 May 2015. I suggest that you make sure that the German authorities are aware of your permanent departure.
There is, as you are probably aware, a Double Taxation Treaty in force between the UK and Germany under which the same income stream is not taxed in both jurisdictions. This is achieved by means of tax credits, the tax payable in one state being allowed as a tax credit against any liability in the another.
I do hope I have helped you with your question.
Customer: replied 2 years ago.

So is it German source income if I have not lived there during the year at all, but it in effect comes from a German customer? That may be my confusion. Is it only German source if I am living there when doing it?

Expert:  bigduckontax replied 2 years ago.
Even as a non resident, as you now indeed are, you are still taxable in Germany German source income. It is possible that there has been a hang over of payments due to you which have been met after you departure, maybe even in 2014. You will not be taxed twice, the Double Taxation Treaty protects you from the possibility.
I do not see any real difficulty here. It's just the German system being rather thorough, a national characteristic I believe!
Customer: replied 2 years ago.

No hangovers. Everything in 2014 was done while resident in UK. Does that make it not "German source". What I am struggling with is the meaning of German source. If I have a German customer that I am doing online work for, but I do the work totally in the UK, is that a German source. I think I originally thought they meant that, but maybe German source is only work done while living in Germany.

Expert:  bigduckontax replied 2 years ago.
I would submit that it is not, as far as the UK is concerned. It is a service exported to Germany, but as the work is done in the UK it is taxable here. Only work done in Germany would be a German source.
I would be inclined to write to the German authorities and advise them of the situation. I still suspect that they have not grasped that you are no longer resident.
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Customer: replied 2 years ago.

I think this is okay now. I've just figured out what happened. When the initially talked to me about this was after we got mail from them in April 2014 and I told them we were no longer in Germany. I had assumed their offices talked to each other and they knew I had deregistered in Nov, but they didn't. They do know, though, because it came up when I was filing . Okay. This is fine.

Expert:  bigduckontax replied 2 years ago.
Thank you support.