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German Law/German Taxes for a EU US military dependant

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Question
I am a US servicemen assigned to Germany.  My wife is an Austrian citizen and US resident (green card holder).  My wife has received work as a freelance tour guide.  She is paid for each tour and no taxes are pulled.  She has been advised she needs to file for a Financeamt and file personal taxes.  She does not expect to make more than 5.000 Euro per year.  I presume a SOFA stamp does not preclude the need to pay German taxes.

Questions - Because of her limited income, is she required to establish an account (german version of a US social security number) with the Financeamt; is she required to file taxes at the end of the year (I presume YES on both accounts).

If we file a US Joint tax filing, do we need to declare her German Income (again, I presume YES).

How do we avoid double taxation.

What other German declarations must she file.

Any guidance on where I can find these answers is greatly appreciated.

Respectfully,

Answer
Your wife will have indicate her work to the FInanzamt. As she works as a freelancer there is both a VAT and an income tax issue. If she earns as much as you said she can make opt for the Kleinunternehmerregelung so that she does not have to charge to her customers and pay VAT. Income tax returns must be filed but I would not think that there is a tax levied finally. As far as taxation in the US is concerned I would doubt that the US can tax foreign generated income that has no relation to the United States. The answer to this question can be found in the respective Double Taxation Agreement between Germany and the US.If the US imposes taxes she might think of geeting an employment in the sector she works in.

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Henning Haarhaus

Expertise

I can answer questions in English, German and French. Practice in inheritance law, tax, labour and contract law for private clients. Services also rendered in the fields of business & commercial law; e.g. business organizations, contracts, debt collections, leasing law. Representing clients all over Germany. NO CONSULTANCY ON FAMILY AND IMMIGRATION LAW.

Experience

Working since 1999 in the forenamed fields. Henning Haarhaus` experience includes services in the legal department of Roedl & partner, the biggest tax consultancy firm of German origin. Appointed Bar Certified Tax Law Practioner in 2007.

Organizations
Bar Association of Berlin, KIWANIS

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Education/Credentials
German licensed lawyer and bar certified tax specialist

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