German Law/Re-payment of German Pension
My Mother of German/Canadian decent, passed away in Jan 2012.
She received a German pension delivered to a US Bank.
I her Son was the executor of the Will. I am also the beneficiary.
I am a Canadian and live in Canada.
The Finanzamt Neubrandenburg RiA has notified me that I owe them
a large sum of money as a result of Pension paybacks to Germany from 2005 to 2010.
I am in No way connected to Germany or Do I Want to Be.
She has Paid all Taxes on her pensions to the US and Canada to Date and I have Received a Clearance Certificate from the Canadian Government.
I feel am am NOT Obligated to Pay back any of the German Pension Paybacks as I was never Notified that These Paybacks existed until after Her Death.
WHAT are my Legal obligations in this Matter ??????
Any comments would be greatly appreciated!!!!!!!
Unfortunately, as her heir you inherited the German tax burden of your mother even if she had not been aware of them and had not taken care.
Taking legal remedies against the tax assessments could help. Any objection against tax assessments ("Antrag auf Änderung und Einspruch mit Antrag der Aussetzung der Vollziehung") must be filed within one month of their receipt by your mother or you (not the bank).
In your objection you should apply at the tax office for an anullment of the tax assessment, inform them of the double nationality of your mother, the place where she had her last residence in Germany before she moved away and the time when she left Germany. You should send them a copy of her identity card and passport, too. In addition to this you should also opt for unlimited taxation ("Besteuerung der Rente als unbeschränkt Steuerpflichtiger nach § 1 Abs. 3 EStG").
Under the regime of limited tax liability your mother lived under she was not eligible for the special tax allowance of 8.004 € per year which can be deducted from the taxable income (Grundfreibetrag). Since only 50 % of the pension is subject to taxation this tax exemption would have the effect of a deduction of 16.008 €.
As the sucessor of your mother you would be eligible to opt unlimited taxation and thus be entitled the fore mentioned tax allowance if either the worldwide income of your mother in each respective calendar year would have been subject to at least 90 percent of the German income tax, or if such income would not have been subject to German income tax because it - eg an additional pension in Canada or capital income there - was less than 8004 euro.
As a prove you would have to produce documentation issued by the tax authorities of the country in which they live confirming the amount of their income there.
If one of the fore mentioned conditions are met, the application is granted and the basic allowance of 8004 euros but again credited, less any additional income abroad.