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Exit Tax: Leave Germany before your business gets big

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Re: Exit Tax: Leave Germany before your business gets big

#451

Post by carlosjobim »

seabass-labrax wrote: post #355
carlosjobim wrote: post #352

Earlier quoted context omitted.

> If your mortgaged house depreciates while you are still paying off the mortgage, you still need to pay the original, un-depreciated amount. Mistake in logic. The money you received as a loan doesn't depreciate in value if the underlying asset depreciates in value. And vice versa. As for interest, if your real estate has appreciated by a factor of 9 as in the example we're discussing, then interest rates are of mino…

OK, 9x the value of your property as liquid wealth is nice, but you'll still need to pay it back eventually, won't you?

After you've paid it back, you still own the property which is 9x the value, or maybe more. So you can cash out instantly, without having to move out. And you get to pay it back in 30 or 50 years time. By that time, the money is worth half or less than half than what it is today. And your interest is much less than inflation. And you can deduct the interest from your taxes.

Re: Exit Tax: Leave Germany before your business gets big

#452

Post by carlosjobim »

mytailorisrich wrote: post #349
carlosjobim wrote: post #336

Earlier quoted context omitted.

There's nothing sensational about it, and I'm disappointed that you cannot see this thing for what it is. Ask people among your relatives who own real estate and you will realize that a lot of them mortgaged their real estate to pay for new cars, vacations, investment in a business, kid's education. The money is paid back over a long period of time, while the currency depreciates in value and the real estate apprecia…

> I can sell the real estate or I can mortgage it and borrow against its value You make money if you sell. You don't if you use the asset as security for a loan. This has been explained several times. A loan is a loan, whether it is a secured loan or not. A mortgage is a secured loan whose security is real property. You are effectively claiming that getting a loan is making money. Obviously you do not see that this i…

Instead of repeating myself, let me hear your side of the argument. If my property increased 9 times in value and I can:

A) Sell it and get that money right now, or

B) Mortgage it and get all or part of that money right now, then pay it back in the future.

By what kind of logic have you not made money from the value increase?

> You are effectively claiming that getting a loan is making money.

No, I said that you made the money when the value increased. Your ability to take a loan against it is the evidence that the value in fact increased. I never said anything else.

Re: Exit Tax: Leave Germany before your business gets big

#453

Post by CamperBob2 »

axus wrote: post #450
pc86 wrote: post #375

Earlier quoted context omitted.

No reasonable person on the planet can look at that table showing a €700k exit tax on a company making €200k/yr profit and think "yeah that sounds fair."

I wouldn't say its fair, but it's good for Germany. In the US, I don't like American companies moving to other countries.

Of course it isn't good for Germany. It causes new businesses to be started and operated somewhere else.

Re: Exit Tax: Leave Germany before your business gets big

#454

Post by jwr »

CalRobert wrote: post #267
jwr wrote: post #195

Earlier quoted context omitted.

The US does not have an exit tax for businesses, but has an absolutely horrible tax system in which expats are treated badly. The reporting requirements for expats are insane: all bank/brokerage/whatever accounts with max levels during the year, FATCA and FBAR forms, and the cherry on top: Form 8858 ("Foreign Disregarded Entities", whatever that is) which is needed for your self-employment and for each of your rental…

Not to mention pfic rules making simple index investing impossible.

Does that affect individuals investing in ETFs through a brokerage account? I thought you only needed to provide information on the total value of each brokerage account?

Re: Exit Tax: Leave Germany before your business gets big

#455

Post by bhelkey »

trallnag wrote: post #319
cpursley wrote: post #247

Earlier quoted context omitted.

Don’t forget the energy suicide Germany has committed. Cheap energy was the backbone of Germanys rich industrial economy, and that rug has been (allowed and even encouraged) to be pulled by none other than the country now offering them a “very good price” on LNG…

Did you miss the Russo-Ukrainian war? Or are you suggesting that we (Europeans) should have continued pumping cash into Russia for a bunch of gas?

I think what they were referring to Germany phasing out nuclear power.

In 2011 Germany had 17 active nuclear power plants. They closed their last one in 2023.

Re: Exit Tax: Leave Germany before your business gets big

#456

Post by eqvinox »

throw9349494 wrote: post #425
eqvinox wrote: post #304

Earlier quoted context omitted.

You might've mixed up your analogy there, Gestapo was a German 3rd Reich thing… NKVD would be the Soviet one.

Germans (including gestapo) gassed a few million people here. Soviets (including NKVD) liberated survivors. But maybe I read wrong history books.

That wasn't what I meant, I'm confused why you're associating the Gestapo with Eastern Europe. They were active in all of German controlled Europe with a pretty bad reputation almost everywhere. The nazi mass murders also have more of an association with the SS rather than the Gestapo, especially when it got worse in the later years.

(FYI, the NKVD killed more than 100'000 Poles in a just a few months in 1941. I haven't found a total. But they were also active in all of the CCCP. Not sure what would be an Eastern Europe specific reference here…)

Re: Exit Tax: Leave Germany before your business gets big

#457

Post by eqvinox »

throw9349494 wrote: post #258
jacquesm wrote: post #246

Earlier quoted context omitted.

> this is a topic where LLMs can be helpful. That's probably the very last spot where you want to use an LLM, especially not in Germany. One single mistake can cost you a fortune, and you won't be able to spot the mistake because you're not an expert. LLMs could be used to prime you for conversations with an expert (but be prepared to be corrected on points of law and fact) but they are no substitute. Corporate law i…

Crazy theory: most posts here are from German Tax office. They give a "free" advice, and send a fat tax penalty 5 years latter! Suprise: you never left!

If you move back to Germany within 7 years, you actually don't have to pay the tax, so this would be a pretty poor use of their time :P

Re: Exit Tax: Leave Germany before your business gets big

#458

Post by BobaFloutist »

chmod775 wrote: post #449
BobaFloutist wrote: post #434

Earlier quoted context omitted.

How on earth are Tesla, Uber, and T-Mobile not "high-tech"?

They're not exactly building leading-edge stuff, though they sometimes buy from companies that do. Out of those you could only make an argument for Tesla, because at least they were pushing the envelope for a short while in the past (though more from a business standpoint), rather than merely operating within the possibilities of existing technologies others created. Generally a high-tech company will have significan…

I guess that's fair. What about high-tech burrito? https://www.hightechburrito.com/

Re: Exit Tax: Leave Germany before your business gets big

#459

Post by realityking »

BillyTheKing wrote: post #329
tomschwiha wrote: post #308

I think the numbers in the article are mixed up. Earnings 200k. Wage 120k. So the profit is 80k for the calculation. 80×13,75=1.100k. 60% of it = 660k. Personal tax at 120k income = 45%. More likely less as for health insurance, etc. 660k×45% = 297k exit tax. Which can be paid in 7 yearly rates. So 42k per year. You still have a company that has earnings of 200k.

This means the person has to move to a country with 0% income tax for this to make any economic sense, so that's either Monaco or the UAE then. Very difficult for me to understand why someone is supposed to pay this tax in the first place, the business paid a whole bunch of other taxes in its lifetime. I would understand if they'd tax the sale of the business.

Its purpose is to avoid business owners to move to a low-tax place 12 months before selling their business and then move back to Germany another 12 months later, thus avoiding any tax on the increase in value of the business.

Re: Exit Tax: Leave Germany before your business gets big

#460

Post by oulipo »

zgk7iqea wrote: post #183
oulipo wrote: post #163

Earlier quoted context omitted.

[flagged]

maybe better in terms of overall living standards but not in terms of innovation or the state being friendly to someone running a business

well what matters in the end is living standard. Innovation is cool, but it's pointless if it is to serve a stupid fascist society
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