What should I consider when earning income in multiple countries to avoid double taxation?
October 23, 2023 | 110,00 EUR | answered by Yvonne Schreiber
Dear Sir or Madam,
My name is Chloé Schlosser and I am currently working in Germany. In the future, I plan to generate additional income abroad. I have concerns regarding double taxation and would like to know what aspects I should consider in order to avoid this.
Currently, I am already paying taxes on my income in Germany. If I were to also earn income abroad, I fear that I would be taxed there as well. This would mean that I would have to pay taxes twice on the same income, which would not be financially feasible for me.
I would like to know what measures I can take to avoid double taxation. Are there any agreements between countries that can solve this problem? Or are there specific regulations that I should consider in order to optimize my tax burden?
Furthermore, I am interested in whether it would be advisable to consult a tax advisor specializing in international tax issues. Could you assist me in selecting a suitable expert?
Thank you in advance for your help and support. I look forward to hearing from you and utilizing your expertise.
Sincerely,
Chloé Schlosser
Dear Mrs. Schlosser,
Thank you for your inquiry regarding double taxation and the challenges associated with earning income abroad. It is understandable that you have concerns about having to pay taxes twice on the same income. However, there are measures you can take to avoid double taxation and optimize your tax burden.
One important way to avoid double taxation is through the use of double taxation agreements (DTAs) between the countries involved. These agreements determine which country has the right to tax certain income and how double taxation can be avoided. Germany has signed such agreements with many countries to regulate the taxation of cross-border income.
It is advisable to familiarize yourself with the applicable DTAs between Germany and the country where you intend to earn additional income. This way, you can determine if and to what extent income earned abroad can be exempt from tax in Germany, or if there are ways to minimize the tax burden.
Another important aspect to consider are the tax regulations in the country where you intend to earn additional income. It may be the case that different tax laws apply there, and you may be required to file a tax return in that country. In some cases, you may also be able to apply for an exemption from withholding tax or a refund of taxes paid abroad.
Consulting with a specialized tax advisor for international tax matters can be very beneficial to ensure that you consider all relevant aspects and optimize your tax obligations. An experienced tax advisor can assist you in analyzing and optimizing your tax situation, especially when it comes to avoiding double taxation.
It is recommended to choose a tax advisor who has solid knowledge in the field of international tax matters and has experience with similar cases. You can reach out to the tax advisor chamber or other professional associations to find a suitable expert. Additionally, personal recommendations from individuals who have faced similar tax challenges can be helpful.
I hope this information is helpful to you and supports you in planning your international income. If you have any further questions or need assistance, please do not hesitate to contact me.
Best regards,
Yvonne Schreiber
Tax Advisor for International Tax Matters
