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Taxpayer group slams Merkel’s pricey ads thanking Germans

A group representing German taxpayers on Wednesday attacked Chancellor Angela Merkel over pricey newspaper adverts thanking citizens for overcoming the recession and calling on them to stick by the government.

Taxpayer group slams Merkel’s pricey ads thanking Germans
Photo: DPA

Karl-Heinz Däke, from the Federation of Taxpayers told news agency AFP: “I can’t believe the cheek,” referring to the rare €2.8 million ($3.8 million) campaign that appeared in every major daily newspaper.

“Thank you, dear citizens. You have made Germany the country that has best overcome the global economic crisis,” Merkel wrote in the large ad from the government, not her conservative Christian Democratic Union (CDU) party.

“The world looks at our country and is talking of a miracle. I do not believe in miracles, but I do believe in the people of this country, in their ideas, in their good sense and in their engagement.”

But she also took some of the credit for getting Europe’s biggest economy through its worst post-war recession in 2009, saying government measures had kept a lid on unemployment and cut financial slack for families and firms.

Since winning a second term in September 2009, Merkel’s popularity ratings have fallen ahead of a crunch year when six of Germany’s sixteen states hold elections.

At a conference of her conservative party on Monday, Merkel said that voters would soon warm to her government once the benefits of her “contentious” policies on energy, tax and healthcare became clear.

Germany, the world’s second top exporter after China, was hit harder than most by the global recession, as demand for its goods dried up.

However, it has rebounded impressively and the forecast from Berlin is of 3.4 percent growth this year.

AFP/rm

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READER QUESTIONS

EXPLAINED: Do I have to declare income from foreign sources on my German tax return?

If you're a resident in Germany, you will typically have to declare and pay tax on your worldwide income. But there may be some exceptions in certain cases.

EXPLAINED: Do I have to declare income from foreign sources on my German tax return?

If you’re filling in a German tax return, you are generally legally required to declare and pay tax on all income you earn – wherever in the world you earn it. This is true even if you keep the money abroad.

In most cases, your worldwide income is subject to what’s called “unlimited tax liability” – which means that there’s no exemptions or discounts on your taxes for money earned abroad – whether its from work or capital gains like the sale of stocks. This is generally even true if Germany doesn’t have a Double Taxation Agreement (DTA) with the other country in question.

If, however, Germany does have a DTA – some of your tax might end up getting limited in Germany. This is generally providing that you’ve paid it in the other country.

For example, the US may apply a withholding tax to payments made to you for freelance services you provide in the US, for example. In this case, the DTA between Germany and the US would allow you to submit documentation proving that you’ve already paid tax on this payment in the US. That’ll prevent you from having to pay tax again in Germany on the amount that actually gets wired to your account.

READER QUESTION: How can I find a German tax advisor?

Who has a double taxation treaty with Germany?

Germany has concluded double taxation agreements with numerous – but not all – countries and territories. You can check out the German government’s dropdown menu here to see which countries are on the list.

German residents earning money in other EU countries should still check this list, as certain tax provisions may be unique to the two countries in question.

READ ALSO: Everything you need to know about paying taxes in Germany

What about rental income?

As a general rule, rental income is taxed in the country where the property is located, meaning you don’t have to declare or pay it in Germany. There are some notable exceptions – for example if the property is located in Spain. In this case, you would report this income in Germany.

What about inheritance?

Some double taxation agreements have clauses that specifically govern what tax rules there are around inheritance that a German resident might get from abroad.

In general, the inheritor will still have to pay inheritance tax in Germany, but could see their tax liability reduced if tax already has to be paid abroad.

There are also other exceptions possible, such as if a child receives a property in their parent’s will and then proceeds to live in it for at least 10 years after they acquire it. In this case, they may not need to pay any tax on it.

In certain complicated cases – or if you have any doubt – it may be a good idea to seek out the services of a professional tax advisor who can make sure you don’t get in trouble with the Finanzamt (tax office). 

READ ALSO: Do foreigners owe tax in Germany on money that is inherited from overseas?

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