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Question about limited tax liability

August 1, 2019 | 50,00 EUR | answered by Steuerberater Knut Christiansen

Question regarding limited tax liability: Residence in an EU country, registered business in Germany. My taxable income in Germany was €13,495 in 2018. The tax office increased this amount by the German basic tax allowance of €9,000. Is this permissible? No progression clause is applied for foreign income. The business is registered in Germany - can separate taxation take place? Company in Germany - privately in an EU country?
For my work as a musical solo entertainer, I am required to pay mandatory contributions to the German social security system and have deducted these as business expenses. The tax office considers this as private pension provision and denies the deductibility. Is this correct?

Steuerberater Knut Christiansen

Hello,

With limited tax liability, only your domestic income is subject to income tax. In addition, there is no entitlement to the basic tax-free allowance. Therefore, the tax office has treated this correctly.

Social security contributions are also not considered business expenses. This has also been correctly handled by the tax office.

I regret not being able to bring you better news. If you have any further questions, please feel free to ask.

Best regards,

Knut Christiansen
Tax consultant