Preparation of income tax returns


Laws - standards - directives in Germany

In principle, German income tax is governed by the German Income Tax Act (EStG). However, many details and directives cannot be found in the German Income Tax Act, but are instead in the tax regulations and tax waivers of the tax office. In addition, the case-law of the Bundesfinanzhof (Federal Finance Court) must be repeatedly consulted and followed. For the taxpayer, this deluge of regulations represents an almost impenetrable thicket. The expert advice of tax accountants can pay off, even with the seemingly simplest income tax return. A citizen domiciled or ordinarily resident in Germany is subject to unlimited income tax liability in accordance with the worldwide income basis, i.e. taking into account all of their income globally. Bilateral regulations in double taxation agreements can assign individual income either to the source country or the country of residence. Foreigners may be liable for limited tax liability in respect of domestic income. For EU citizens, there are further specific arrangements.

Construction of the German Income Tax Act

The German Income Tax Act recognises the following types of income:

  • Agricultural and forestry §§ 13-14 EStG 
  • Business operations §§ 15-17 EStG 
  • Self-employment § 18 EStG 
  • Work under an employment contract § 19 EStG 
  • Capital assets § 20 EStG
  • Rental and leasing § 21 EStG 
  • Other income §§ 22-23 EStG

The amount of the respective income is determined according to the earnings basis method (balance sheet), or either as an excess of income over expenditure, or an excess of income over advertising costs. After determining the amount of income, you can offset losses (sometimes limited) and deduct a variety of special allowances, pension expenses and extraordinary burdens. There are also arrangements to note with regard to children, household services, tradesman services, etc. The taxable income on the income tax return is calculated from the total of all income and once all deductions and allowances etc. have been taken into account.

The tax rate

No income tax is due on taxable income of up to €8,652.00 (basic allowance). At €8,653.00 taxation is levied at an initial tax rate of 14%. As the level of income increases, so does the tax rate (progressive) until it reaches the top tax rate of 42% with an income of €53,665.00. A surcharge of 3% is also added when the taxable income reaches €254,447.00 (so-called wealth tax). The amounts above pertain to individual tax assessments. For spouses in Germany, assessment of the tax is normally made on a joint basis, and exemptions and limits are doubled.

Help with your income tax return

The tax accountants and staff at Viehbacher law firm not only have an outstanding knowledge about profit calculation on all types of income as well as other areas of income tax law, but are also proficient in special provisions and case-law. We believe that, as a taxpayer, you have the right to make use of all legal means to reduce your tax burden. We will help you with this and look forward to hearing from you!


Laws - standards - directives in Austria

The income tax return in Austria is governed by the Austrian Income Tax Act (EStG). In individual cases, the tax regulations and tax waivers of the tax office are also taken into account. Shortcomings in interpretation are closed by case-law. Income tax is levied on the income of all natural persons who are ordinarily resident or have their domicile in Austria. Bilateral regulations in double taxation agreements can assign individual income either to the source country or the country of residence.

Construction of the Austrian Income Tax Act (EStG)

§ 2, para 3 EStG recognises the following types of income:

  • Income from agriculture and forestry (§ 21), 
  • Income from self-employed work (§ 22), 
  • Income from business operations (§ 23), 
  • Income from work under an employment contract (§ 25) 
  • Income from capital assets (§ 27; such as savings certificates or savings books and securities. This income is usually taxed together with capital gains tax as final taxation and does not need to be recorded in the tax return) 
  • Income from rental and leasing (§ 28) 
  • Other income within the meaning of § 29 (remuneration in respect of services, function fees, or speculations that were not already covered by the first six types of income).

The tax rate

No income tax is due on taxable income of up to €11,000.00. Income between €11,001 and €18,000 is taxed at 25%. A total of seven tax brackets exist for income tax, rising to 55% (for income exceeding €1,000,000). There is no provision for the joint tax assessment of spouses in Austria; the principle of individual taxation applies.

Help with your income tax return

Types of profit calculation on all types of income and other areas of income tax, in addition to expertise in special provisions and case-law, all form part of the specialist knowledge of our tax accountants and staff at the Viehbacher law firm. As a taxpayer, you have the right to use all legal means to reduce your tax burden – we can provide you with competent help to ensure you benefit the most from the situation. We look forward to hearing from you!


Laws - standards - directives in Liechtenstein

A citizen domiciled or ordinarily resident in Liechtenstein is subject to unlimited income tax liability in accordance with the worldwide income basis, i.e. taking into account all of their income globally. Individual income can be assigned through bilateral regulations in double taxation agreements to either the source country or the country of residence. Foreigners may be liable for limited tax liability in respect of domestic income and assets. For cross-border workers, there are further specific arrangements.

Assets and liabilities must be recorded at market value. A notional so-called "nominal income” is currently calculated at 4% of the net assets, which is taxed as earnings.

In addition to this nominal income, Liechtenstein tax law recognises the following types of income, among others:

  • Income from self-employed or salaried employment 
  • Compensation for corporate bodies 
  • Pensions and capital benefits
  • Insurance benefits
  • Maintenance expenses, etc.

Examples of non-taxable items, however, are:

  • Income from assets on which wealth tax (nominal income) is paid, such as dividends, interest received, lease contracts for private property, etc.
  • Earnings from permanent establishments located abroad
  • One-time asset gains in the form of inheritance and gifts 
  • Capital gains from the sale of components of movable and immovable private assets, etc.

In addition to tax law, an important basis for taxation is the administrative regulations (notices and directives), in which the tax department specifies individual aspects of tax liability and tax assessment. In addition, the case-law of the Liechtenstein State Court must be repeatedly consulted and followed.

Even if you have the seemingly simplest income tax return, taking the expert advice of tax accountants can pay off.

Help with your income tax return

After determining the amount of income, you can offset losses (sometimes limited) and tax deductibility can apply to a multitude of special allowances, pension expenses and extraordinary burdens. There are also arrangements to note with regard to children, donations, etc. The taxable income is calculated from the total of all income and once all deductions and allowances etc. have been taken into account.

The consultants at the Viehbacher law firm not only have outstanding knowledge of the specific aspects and details of income tax law, but are also experts in special provisions and the relevant case-law.

As a taxpayer you have the right to use all legal means to reduce your tax burden. Our Liechtenstein tax experts will help you and happily advise you in this regard. We look forward to hearing from you!


Laws - standards - directives in Switzerland

In Switzerland, taxation of income basically takes place on three levels. The federal authorities levy direct federal tax, while the cantons and local authorities levy canton tax or municipal tax. The legal basis for direct federal taxation is the Federal Act on Direct Federal Taxation (DBG). Cantons and the local authorities rely on respective cantonal and local fiscal regulations in assessing tax. The many circulars, newsletters, leaflets and guidance that the tax administration publishes to specify certain aspects of tax liability and tax assessment play an important role. In addition, the case-law of the Federal Administrative Court and the cantonal courts must be repeatedly consulted and followed.

For the taxpayer, this deluge of regulations represents an almost impenetrable thicket when trying to complete an income tax return. The expert advice of tax accountants can pay off, even with the seemingly simplest income tax return. A citizen residing or ordinarily resident in Switzerland is subject to unlimited income tax liability in accordance with the worldwide income basis, i.e. taking into account all of their income globally. Bilateral regulations in double taxation agreements can assign individual income either to the source country or the country of residence. Foreigners may be liable for limited tax liability in respect of domestic income. For cross-border workers and foreigners with identity document B for foreign nationals, there are further specific arrangements.

  1. Direct Federal taxation
  2. Cantonal and municipal taxes
  3. Help with your income tax return

1. Direct Federal taxation

Direct Federal taxation is an income tax and mainly relates to the following types of income:

  • Taxation of income for natural persons that are either employed nor self-employed (Article 16 et. seq. DBG)
  • Taxation of profit with regard to legal and accounting professions (Article 57 et. seq. DBG)
  • Withholding tax in the event of foreign taxable persons and certain other groups of taxable persons (Article 83 et. seq. DBG)

In terms of taxation methodology of legal persons, tax law differentiates between companies or corporations (AG, GmbH), cooperative societies and other corporations such as associations or foundations.

2. Cantonal and municipal taxes

Each canton levies their own income and assets tax for natural persons, or profit tax and tax on capital with regard to corporations. The municipal tax is calculated as a percentage of the cantonal tax. The tax rates in the different cantons for natural and legal persons, as well as the so-called “taxation coefficient" of each individual municipality, can vary widely from one place to another. These are important factors when choosing a place of residence for your family or a head office for your business. There may even be up to double-digit differences in the total tax burden in municipalities that are next to each other. There is often strong tax competition between municipalities and cantons.

3. Help with your income tax return

After determining the amount of income, you can offset losses (sometimes limited) and deduct a variety of special allowances, pension expenses and extraordinary burdens. There are also arrangements to note with regard to children, household services, etc. The taxable income is calculated from the total of all income and once all deductions and allowances etc. have been taken into account.

The consultants and staff at Viehbacher law firm not only have an outstanding knowledge about types of profit calculation on all types of income as well as other areas of income tax, but are also proficient in special provisions and case-law. We believe that, as a taxpayer, you have the right to make use of all legal means to reduce your tax burden. Our Swiss tax accountants will help you and happily advise you in this regard – we look forward to hearing from you!


Italy

Our information in the English language concerning preparation of income tax returns in Italy is currently still being developed. We kindly ask for your understanding. Therefore, please do not hesitate to contact us directly with your queries and concerns. For over ten years now, we have been preparing income tax returns for clients in five different countries. With us you are always competently advised and well represented. We look forward to receiving your message or call!

Your contact persons

Uwe Bruckner, Dipl.-Kfm., Steuerberater, Fachberater für Internationales Steuerrecht

» Uwe Bruckner

Dipl.-Kfm., Tax Consultant, Specialist Advisor for International Tax Law

email: u.bruckner@viehbacher.com

Siegrid Rosenauer, Dipl.-Kffr., Steuerberaterin Österreich, Steuerberaterin Deutschland, Fachberaterin für Internationales Steuerrecht, Wirtschaftstreuhänderin

» Siegrid Rosenauer

Dipl.-Kffr., German and Austrian Tax Consultant, Specialist Advisor for International Tax Law Commercial Trustee

email: s.rosenauer@viehbacher.com

 

Your contact person

Siegrid Rosenauer, Dipl.-Kffr., Steuerberaterin Österreich, Steuerberaterin Deutschland, Fachberaterin für Internationales Steuerrecht, Wirtschaftstreuhänderin

» Siegrid Rosenauer

Dipl.-Kffr., German and Austrian Tax Consultant, Specialist Advisor for International Tax Law Commercial Trustee

email: s.rosenauer@viehbacher.com

 

Your contact persons

Michaela Berger, Steuerexpertin, Treuhänderin mit eidg. Fachausweis

» Michaela Berger

Tax Consultant and Trustee with Federal Professional Certification

email: m.berger@viehbacher.com

Max Gross, LL.M., zugelassener Treuhänder und Steuerexperte

» Max Gross

LL.M., Certified Trustee and Tax Consultant

email: m.gross@viehbacher.com

Your contact persons

Peter Fröhlich, Rechtsanwalt und Dipl. Steuerexperte

» Peter Fröhlich

Lawyer and Certified Tax Expert

email: p.froehlich@viehbacher.com

 

 

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