How can I avoid my income being taxed twice?
September 26, 2022 | 125,00 EUR | answered by Guido Hoffmann
Dear Tax Advisor,
I am Alice Keck and currently working as a freelance translator in Germany. Lately, I have started accepting assignments from abroad and now have concerns regarding the double taxation of my income.
Currently, I am in a situation where I have to pay taxes on my earnings in both Germany and abroad, which could potentially lead to double taxation. This means that I may have to pay taxes on a portion of my income twice, resulting in financial losses.
My concern is that I am not sure how to avoid this double taxation and what steps I need to take to properly declare my income without being taxed twice.
Could you please provide me with possible solutions on how to avoid my income being double taxed? Are there any specific regulations or agreements between Germany and the country where I am carrying out my assignments that can help me navigate this situation?
I appreciate your support in advance and look forward to your professional advice.
Sincerely,
Alice Keck
Dear Ms. Keck,
Thank you for your inquiry regarding the double taxation of your income as a freelance translator, resulting from assignments abroad. It is understandable that you are concerned about potential financial losses due to double taxation. I will now provide you with possible solutions and steps to avoid this problem.
First and foremost, it is important to know that Germany has concluded double taxation agreements (DTAs) with many countries to avoid the double taxation of income. These agreements determine in which country the income should be taxed and how double taxation can be avoided. Therefore, it is advisable to check whether there is such an agreement between Germany and the country where you carry out your assignments.
Generally, the income of self-employed individuals such as translators is taxed based on their country of residence. This means that you should pay taxes on your income in Germany and only pay taxes in the foreign country to the extent specified in the DTA. It is important that you properly declare all income in your tax return and provide any necessary documentation to benefit from the provisions of the DTA.
If there is no DTA between Germany and the country where you operate, you may indeed have to pay double taxation. In this case, I recommend seeking advice from an experienced tax advisor to assess your individual situation and discuss possible alternatives. There may be other tax regulations and structuring options to minimize or avoid double taxation.
In conclusion, I encourage you to consult with a tax advisor early on and gather all relevant information to minimize potential tax risks. I am available for further questions and wish you success in optimizing your income tax.
Sincerely,
Guido Hoffmann
Tax Advisor
