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Germany: Worked Example of Tax on Rent

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Last Updated: Mar 21, 2007

Tax Example: Rent

Non-resident couple's joint monthly rental income1 €1,500 €6,000 €12,000
Annual Rental Income 18,000 72,000 144,000
Less Costs2 (1,500) (5,100) (9,200)
Less Depreciation3 (5,701) (20,160) (40,320)
= Taxable Income 10,799 46,740 94,480
Income Tax Rates4
Income Tax Due 2,700 2,700 23,963
Annual Income Tax Due €2,700 €11,685 €23,963
Surtax
Solidarity surcharge5 5.5% 148 643 1,318
Annual Income Tax Due €2,848 €12,328 €25,281
Tax Due as % of Gross Income 15.82% 17.12% 17.56%
Thanks to:
Grant Thornton Germany

DISCLAIMER: The information contained above is marketing material only and is not written tax advice directed at the particular facts and circumstances of any person and should not be relied upon. We encourage you to discuss your particular situation with us or an independent tax advisor. This information was last updated on march 15 2007.

Notes


Grant Thornton Germany is a member firm of Grant Thornton International. Grant Thornton International is not a worldwide partnership. Member firms of the international organization are independently owned and operated.

1 The property is jointly owned by husband and wife.

2 Estimated values. Actually incurred expenses effectively connected with the property can be deducted from the gross rental income to arrive at the taxable income (property management fees, maintenance and repairs, etc.).

3Depreciation is available on the building only, not on the land. For properties with land, it is assumed that 70% of the total costs accounts for the building.

4Minimum average tax rate for non-EU residents is 25%.

5The 5.5% solidarity surcharge is levied on the annual income tax liability.

Your Comments

posted by Emmanuel Petitjean | 2008-01-12

Engineer, Duesseldorf

Hi There,I am of the opinion that your German Tax example is wrong. The latest column with a monthly rental income of 12000EUR, which gives a taxable income of 94480EUR, probably commands more than 24000EUR of taxes, because at this level this would represent a taxation level of 25.3%. I calculate myself 31474EUR, which represents about 33% tax.Please advise and correct if needed,Regards,Emmanuel

posted by Fredrik | 2008-01-21

Luxembourg

Is the 7664 € tax exception level applicable for non -residents?Thanks for very good info.Best regardsFredrik Svensson

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