How can I, as a freelancer, minimize the double taxation of my income?
July 17, 2022 | 120,00 EUR | answered by Isabel Zimmermann
Dear tax advisor,
my name is Leon Schröder and I work as a freelancer. Lately, I have been focusing on the issue of double taxation of my income and would like to know how I can minimize it.
Currently, I earn income from my freelance work, which I carry out in Germany. However, since I also have business contacts and clients abroad, taxes are also levied there. This leads to a double taxation of my income, as I have to pay taxes in both Germany and abroad.
This double taxation is a financial burden for me, and I am concerned about the long-term effects on my tax burden. Therefore, I am looking for ways as a freelancer to minimize the double taxation of my income.
Could you please provide me with specific solutions on how I can reduce the double taxation of my income as a freelancer? Are there any special tax regulations or agreements that I can take advantage of to reduce the tax burden? I would greatly appreciate your expertise and support in this matter.
Thank you in advance for your help.
Sincerely,
Leon Schröder
Dear Mr. Schröder,
Thank you for your inquiry regarding the double taxation of your income as a freelancer. It is understandable that the double taxation of your income poses a financial burden and that you are looking for ways to minimize it.
One way to reduce the double taxation of your income is by utilizing Double Taxation Agreements (DTAs). DTAs are international agreements between different countries that determine which country has the right to tax certain types of income. These agreements are designed to prevent taxpayers from being taxed on the same income in two different countries.
As a freelancer with business contacts and clients abroad, you may benefit from the provisions in DTAs. Typically, these agreements stipulate that income should only be taxed in the country where the taxpayer is a resident. By applying a DTA, you can avoid having your income taxed both abroad and in Germany.
It is important for you to familiarize yourself with the specific provisions of the DTA between Germany and the country where you conduct business. This will ensure that you can utilize the provisions effectively to reduce your tax burden.
Additionally, it may be beneficial to seek advice from a tax advisor specializing in international tax law. An expert can help you understand the tax opportunities and pitfalls related to the double taxation of your income, and find the best solutions for your individual situation.
I hope that this information helps you minimize the double taxation of your income as a freelancer. If you have any further questions or require personalized advice, please do not hesitate to contact me.
Best regards,
Isabel Zimmermann
Tax Advisor
