Ask a tax advisor on the topic of Double taxation

Dual citizen - D and CH - with a company in CH intends to establish a company in D.

December 16, 2016 | 50,00 EUR | answered by StB Patrick Färber

Hello,

I am a German and Swiss dual citizen and I own a company in Switzerland, where I have been working for 9 years and also lived almost continuously until two years ago. My wife - who is only a German citizen - is employed at my company as the deputy managing director. We are both registered in Munich - where our children, aged 22 and 16, live - as well as in Zermatt. The journey, for example by train, takes eight hours, and depending on necessity, my wife and I commute together or alternately. We have our residence registered in both countries, and we each live in a house owned by me in both countries.

In Munich, I have had a recording studio installed in our house in several phases, which is now almost finished and used purely for private purposes. However, this is set to change in the spring after certain structural expansions. A music label will also be established, and official productions will be able to take place, and at least the premises will be able to be rented or booked. This will result in a final bill in addition to the previous installments.

Now to my questions:
1. Can double taxation be avoided?
2. If so, could you recommend a tax advisor who is competent in this specific situation?
3. Can the previous investments be written off over more than two years?

Thank you for your response and best regards.

StB Patrick Färber

Dear inquirer,

Double taxation, in the sense that you pay taxes twice on the same source of income in both countries, is usually avoided by the D-CH double taxation agreement. However, there may be economic "overlaps" (such as determination of rates or progression clauses). In your case, further details of the double taxation agreement would need to be examined before a statement can be made.

Please feel free to contact us at post@richtig-gegensteuern.de.

The claiming of previous investments must be carefully examined from both a temporal and a substantive perspective. If the deadlines for the relevant tax years are still open and it can be convincingly demonstrated that the renovation was carried out with the intention of establishing a company, claiming may be possible.

Without further detailed examinations, it is not possible to provide more information at first glance.