Repayment due to progression reservation?
December 2, 2012 | 25,00 EUR | answered by Michael Herrmann
In early April 2008, I moved from Germany to Austria and have been receiving income exclusively in Austria from an Austrian employer since the change of residence (previously I had income exclusively in Germany from a German employer). I now wanted to file my tax return in Germany shortly before the deadline and have researched the following:
- My Austrian income is subject to the progression clause in Germany. Instead of the income tax, solidarity surcharge, and church tax of 2630 EUR paid in Germany (for an income of 14507 EUR), around 61,000 EUR will then be subject to tax calculation (including the Austrian salary for the rest of the year).
- Therefore, I fear significant additional payments, as I do not know whether the total sum will also be taken into account for splitting income with my spouse, nor can I claim any moving expenses (since they were all covered by my new employer).
For your information: My wife and I file taxes together. My wife has no income of her own; tax classes 3+5; there is no joint filing in Austria.
- Consequently, I even considered not submitting a tax return. However, since I am now subject to the progression clause, I probably have to do it (mandatory filing).
Question: Do I have to file a tax return and should I expect significant additional payments in this case?
Thank you and regards.
Dear inquirer,
first of all, thank you for your inquiry, which I would be happy to answer based on the information provided and in the context of your situation in an initial consultation. The response is based on the facts presented. Missing or incorrect information regarding the actual circumstances can affect the legal outcome.
Since you have a residence in Germany, you are subject to unlimited tax liability here. Your entire income is generally taxable, regardless of where it was earned. The Austrian income is indeed tax-free, but it is taken into account to determine the tax rate of your domestic income (progression clause).
Since you receive income subject to the progression clause, you will be required to file a tax return, not just a request for assessment. You must submit an income tax return.
However, since your German income is below the basic tax-free allowance for married couples, you can expect only a small tax assessment or additional payment. An exact calculation can only be done through a specific tax assessment, which your information does not provide.
It is important, however, that you cannot avoid submitting the income tax return.
I hope that these explanations have given you a sufficient overview of the situation within the scope of your inquiry and this initial consultation.
Best regards,
Michael Herrmann
Dipl.-Finanzwirt (FH)
Tax Consultant
