Question I am a non-resident of Germany. We would like to buy some commercial real estate in Germany and then give it for rent. How can we minimize the Taxation in Germany?We shoud probably use some kind of German company?
Answer There is no general rule according to which a company is more tax effecient than a private individual. Any profit generated by a corporation is subject to corporation taxes including solidarity surcharge of 15,825 %. Furthermore, companies have to pay the municipal business tax on gains. If dividends are paid out capital gains tax of 25 % plus solidarity surcharge are imposed but they can be claimed back at the Federal Tax Office. Furthermore, companies have to maintain an accounting and they have to set up a balance sheet every which adds to the costs. Salaries paid to the directors of the company can be deducted from the profits of the company but they are subject to income taxation. If a company or some sort of hybrid organization is advisable depends on each individual case,
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.
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
Education/Credentials German licensed lawyer and bar certified tax specialist