Income Tax Question

[peter1026]

Hi everyone,

this week, on the 1st October I started my new job in France (close to Paris). I must admit an extremely interesting week, I think I'll really enjoy it! Obviously the language is very important, and I need to roll my sleeves-up and start learning.

I have a question regarding my income tax.

The Human Resouces Department say that I need to pay my income tax from Oct to Dec 2008 in Germany (my place of residence and where I worked until 30.09).

They say that, as I have worked more than 183 days in Germany, the remaining days must be paid there.

Can someone please kindly help and advise if this is true!

Thanks.... and a really great forum - it has helped me alot.

Peter

[parsnips]

Originally Posted by peter1026

Hi everyone,

this week, on the 1st October I started my new job in France (close to Paris). I must admit an extremely interesting week, I think I'll really enjoy it! Obviously the language is very important, and I need to roll my sleeves-up and start learning.

I have a question regarding my income tax.

The Human Resouces Department say that I need to pay my income tax from Oct to Dec 2008 in Germany (my place of residence and where I worked until 30.09).

They say that, as I have worked more than 183 days in Germany, the remaining days must be paid there.

Can someone please kindly help and advise if this is true!

Thanks.... and a really great forum - it has helped me alot.

Peter

Hi Peter,
I'm not an expert on german tax rules, but it is my understanding that the french authorities regard you as resident from the day you arrive permanently in france. This is of course to your advantage as it splits the tax year and usually results in a refund from your former country and reduced tax in france. This is how it works for UK immigrants.
Why don't you ask at your local tax office, to be sure, and if they confirm, get something in writing from them to give to your HR dept?

[Bevdeforges]

Basically what parsnips said. You will have to file your German taxes for 2008, based on your worldwide income to 30.09.08 if, as you say, you were resident there until then.

For French purposes, you are tax resident from the day you moved to France. Your employer should be getting you a French social security number and taking French cotisations (social insurances) from your pay starting in October, 2008. As such, you'll have your salary and cotisations reported on your employer's DADS form in January (along with your dates of employment for the year).

The fact that you have income from France means you'll have to file a declaration for 2008, though you may not wind up paying much (or any) taxes. Next year, around April or so, the newsstands will be full of various information booklets offering detail on how to prepare your taxes. (All in French, of course.) You should be able to find out then what the process is for filing for your partial year. (It may be that you'll have to declare your worldwide income, but then explain the part that came from Germany and that you were taxed on it in Germany while resident in Germany. Not sure of that, but it would be consistent with how they do other things for taxes here in France.)
Cheers,
Bev

[peter1026]

Thanks Bev and parsnips - your answers are greatly appreciated!

However, in my case I will not be moving to France (at least until the kids are out of school or on their own two feet), and therefore it makes it just a little bit more complicated. Or do you have any experience with such a case?

Thanks - really great forum.
Peter

[Bevdeforges]

Oh dear, that makes you a "Grenzenspringer" for German tax purposes. There are a full set of rules and procedures for folks like you.

It's a little unusual to be working in Paris and not taking up residence there, so your local HR folks might be looking to get out of a bit of work. Technically, if you are still resident in Germany, they are supposed to be taking German social insurances out of your paycheck (and paying their share of them on your behalf). And they should be taking German income tax out, too.

Companies closer to the border are much more familiar with this - maybe if your company has a branch in Alsace or elsewhere along the border they can get some assistance in exactly how all that is supposed to work on the company side.

For 2008, you should have no trouble, as you won't be spending enough time in France to make you a "resident" - and with your family living in Germany, you've got a good claim on German residence. Next year could be tricky, however. Physically, you will probably spend more time in France than in Germany, and there's the matter of where you will be enrolled in the medical system, retirement system, etc.
Cheers,
Bev