Rental income from the state without double taxation agreement
December 24, 2011 | 50,00 EUR | answered by Oliver Burchardt
I have regular rental income from a property in Afghanistan (without a double taxation agreement with Germany).
I am a German citizen with a permanent residence in Germany.
Questions:
1. Do I have to pay taxes on this rental income in Germany?
2. If yes, according to what principle?
3. Will the taxes already paid in Afghanistan for the property be credited towards the German taxes?
Thank you!
Dear inquirer,
Thank you for your inquiry, which I am happy to answer as part of an initial consultation.
Please note that the tax assessment is based on the information provided in the facts. Adding, changing, or omitting information can alter the assessment, potentially significantly.
As a natural person resident in Germany, you are initially taxable in Germany on your worldwide income. Therefore, you must declare your rental income in Afghanistan as income from letting and leasing in your German income tax return. The determination of the surplus of income over the advertising costs is carried out according to the principles applicable in Germany.
At the same time, German tax law also recognizes taxes paid abroad. Please obtain a certificate from the Afghan tax administration showing the taxes paid there that are comparable to German income tax. You must then complete Annex AUS, declare the income you earned abroad, and state the tax paid there.
Please note, however, that the so-called progression clause applies here. This means that you will effectively be taxed on a portion of your foreign income in Germany.
I hope that my explanations have been helpful to you.
Kind regards,
Oliver Burchardt
Certified Public Accountant
Tax Advisor
