Bike rental Spain
May 7, 2010 | 40,00 EUR | answered by Michael Herrmann
Following situation: I have a company in Spain where I rent out bicycles to fincas (which are purchased by me and placed directly on the finca). Recently, I have also moved back into an apartment in Germany. The company remains in Spain, with a representative taking care of the business when I am not present. Most things can be handled via email. I only live in Germany and do not have any business activities here. I will occasionally fly over to check on things. My question is: Do I need to register a business in Germany now that I have moved into an apartment here? This would mean that I also have to get German health insurance. Alternatively, can I continue to file my taxes in Spain and keep the company registered there?
Dear inquirer,
First of all, thank you for your inquiry, which I would be happy to answer based on the information provided and considering your situation in the context of an initial consultation. The response is based on the description of the facts. Missing or incorrect information about the actual circumstances can affect the legal outcome.
1) According to the description of the facts, you do not need to register a business in Germany, as the business is located in Spain. Therefore, everything remains the same.
2) Since you have a residence in Germany, you are subject to unlimited tax liability here. This means that you must declare all income in a German income tax return, regardless of where it was earned in the world.
3) Because the profit from the business operation is also taxable in Spain according to Spanish tax law, both countries have concluded a Double Taxation Agreement (DTA). Accordingly, Spain has the right to tax these incomes. In Germany, these incomes are subject to the progressionvorhalt.
This means that the Spanish incomes are tax-free in Germany, but they influence the tax rate (progression) of the other taxable German incomes. Therefore, you must submit an income tax return in Germany.
Since you apparently do not have any other incomes, the "issue" is manageable.
I hope that these details have provided you with an initial overview of the situation and remain
Yours sincerely
Michael Herrmann
Dipl.-Finanzwirt (FH)
Tax advisor
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