What steps should I take to avoid double taxation of capital gains?
March 24, 2023 | 110,00 EUR | answered by Isabel Zimmermann
Dear tax consultant,
My name is Heike Voigt and I have a question regarding the double taxation of capital gains. In my case, I have purchased shares in a foreign company and expect to receive a high return soon. Now I am concerned that these profits could be taxed both in the foreign country and in Germany, leading to double taxation.
I am currently unsure of the steps I should take to avoid double taxation. Should I possibly restructure my shares or enter into certain contracts to avoid tax disadvantages? Are there any specific regulations or agreements between Germany and the country where the company is located that could help me?
I would greatly appreciate it if you could provide me with specific steps or recommendations on how to avoid the double taxation of capital gains. It is important to me to manage my wealth efficiently and legally, so I am seeking reliable information and expertise in this area.
Thank you in advance for your support and advice.
Sincerely,
Heike Voigt
Dear Mrs. Voigt,
Thank you for your inquiry regarding the double taxation of capital gains. It is understandable that you are concerned that your profits could be taxed both abroad and in Germany. Double taxation can lead to significant financial disadvantages, so it is important to take appropriate measures to avoid this.
First and foremost, it is important to know that Germany has concluded double taxation agreements with many countries to avoid exactly these situations. These agreements regulate which country has the right to tax certain incomes and what measures can be taken to avoid double taxation.
In your case, where you hold stocks in a foreign company, it is advisable to inform yourself about the double taxation agreement between Germany and the country in question. You can contact the Federal Central Tax Office or a tax advisor to obtain specific information.
There are various ways to avoid double taxation of capital gains. One option would be to apply for a credit or exemption of foreign tax in Germany. In this case, the tax paid abroad is credited against the German tax or an exemption from German tax is granted.
Another option would be to structure your capital investments in a tax-optimized manner. You should consider whether it makes sense to restructure your stocks or enter into certain contracts to avoid tax disadvantages. However, it is important to seek advice from a tax advisor to find the best individual solution for your situation.
Finally, I would recommend that you address the issue of double taxation early on and, if necessary, seek professional support. Early planning can help you avoid tax disadvantages and manage your assets efficiently and legally.
I hope this information was helpful to you and I am available for further questions.
Best regards,
Isabel Zimmermann
