28 Nov 2024
Are you aware of German tax policies that impact your life, savings plans, and money transfer from Germany to Gambia? More than 14,500 Gambians live in Germany and are connected to different German institutions. In 2022, Germany stands 10th among 38 countries for its highest tax ratio in making the country’s GDP. The taxation system of Germany is not as complex as that of other countries because becoming a tax resident follows simple steps. You must follow the policies if you stay in Germany for over six months.
In Germany, individuals have to pay taxes based on their residency status. A resident must pay capital gain, income, residency, and investment tax taxes. However, Gambians in Germany can get relief in taxes for a short time. Individuals who are not residents but working in Germany must pay income tax, considering their overall profit in Germany. Different cases have unique tax requirements. Below is the guide to essential and basic tax requirements for Gambian expats in Germany.
Gambian expats who live away from their homes must understand the essential tax policies. These policies give you an overview of your monthly financial plan. You can save, invest, or send money to Gambia from Germany to help your families.
In countries like the UK, resident expats have to pay an overall tax on their global income, but in Germany, there are separate taxes for non-specified income. Capital gains taxes include all your profit and income resources, such as investments, savings accounts, businesses, rental properties, or interests. The ratio of capital gain taxes depends upon your overall non-standard profit.
German residents also have to pay solidarity tax. These funds are raised to improve Germany's infrastructure. The tax is imposed only on individuals who earn €65,000 or more. As a Gambian expat, you need to pay solidarity tax if you earn more than the specified amount. These taxes are used to better and empower the weaker economic areas within Germany. In the 1990s, the Solidarity Surcharge tax was imposed on all citizens, but later, higher-income earners and business people had to pay this tax.
As a Gambian migrant, you must know how much income tax is implied. Whether you are a tax resident or not, you must pay income tax. The income tax rate is usually between 14% and 42% for individuals with at least an income of 9.985 - 58.596 euros. The rate may vary for individuals with more or less income. You must seek professional help to learn about income tax to manage your income accordingly without delaying your online money transfer from Germany to Gambia.
As a Gambian expat, you must pay social security taxes from your income. A specific amount from your salary is deducted for social support, such as healthcare and lifetime insurance. You can enjoy a lifetime pension after retirement if you pay social security taxes. Just like German citizens, Gambian expats also need to pay this tax.
Anyone working in Germany must pay social security tax to get aid from Germany’s government in the crisis. As an expat, if you suffer unemployment or any other accidents or have financial needs, the government of Germany will serve you from the tax you have paid as social security tax.
In Germany, you must pay annual taxes if any property is registered with your name. You have to pay taxes while buying and annually after your purchase. Furthermore, if you are a descendant of a property owner who is no longer in the world, you have to pay the inheritance taxes of that inherited property. The inheritance tax ratio usually lies between 7% and 50%, depending upon the worth of your inheritance.
A standard tax applied on goods and services in most countries is VAT. You don't need to pay a specific amount of VAT, which is added directly to your purchases. VAT is a crucial tax on all the services you get in Germany. It is automatically included in the final price of a service/product, so there is no way to avoid it as a consumer, whether an expat or a random citizen, all have to pay VAT.
Read more: The Basics of Tax Planning
A common thing that every expat must consider is to find out their residency status. Many taxes are imposed on those individuals who are permanent and registered citizens. If a person doesn't require any permit to stay in the country, it is called a tax resident. On the other hand, someone in a county for a short stay is a non-tax resident. Non-tax residents have to pay only a few taxes compared to tax residents.
Expats can be tax residents or non-tax residents. As a Gambian working in Germany, you must pay income tax, whether you are a resident or not. However, your residency status depends upon the duration of your stay in Germany. You are not a resident if you have been living in Germany temporarily or temporarily. Non-tax residents must consider growing their income and transferring money to the Gambia from Germany to increase their assets and enjoy tax relief. Tax residents can also save and achieve financial stability by approaching and appreciating ways to invest and save money.
Like other countries, Germany also has different taxes for people of different residency statuses. Tax residents must pay taxes on all their income, resources, and profits. Whether you have assets outside the country or inside, you must pay a specific tax amount, considering your profit. However, non-tax residents have relief as they must pay income tax and generic taxes like VAT. Gambian expats must learn about their tax residency status in Germany to fulfil their financial duties. In case of a special case, you must seek financial assistance.
As a Gambian expat, you must verify your residency status to learn about tax eligibility. If you can stay in Germany with restrictions or time limitations, you are a tax resident. However, if you are a temporary resident, you must pay income tax based on your German income. Tax residents and expats in Germany must pay income tax, VAT, capital gain, inheritance, investment, residency, and solidarity tax. Moreover, learn about the dual agreement between Germany and Gambia so you can avoid additional taxes and send money online to Gambia from Germany.
Taxes contribute to the economic growth of a country. Different taxes have different purposes and help uplift the living styles of the people. A tax like solidarity tax and capital gain tax benefits the citizen. It becomes your support when you suffer from a financial crisis. If you pay all the taxes on time, you can enjoy a long-term pension after your job retirement. Moreover, the solidarity tax supports the low regions of the country by strengthening its economic activity. Gambians in Germany must learn about their financial duties to live a secure life.
German tax residents pay numerous types of taxes, such as income tax, VAT, capital gain, inheritance, investment, residency, and solidarity tax. Non-resident expats just need to pay VAT and income tax.
Expats can check their tax eligibility by learning about their residency status. If you are allowed to stay permanently in Germany, you are a tax resident; otherwise, you are a non-tax resident.
A registered individual who can stay in a country without visa restrictions is a tax resident. A tax resident ensures an individual's eligibility for paying taxes. A tax resident has to pay all taxes imposed by the government, whereas non-residents have tax relief.
Yes, there is a double tax treaty with Germany to prevent Gambian expats from paying dual taxes. According to this treaty, expats must pay taxes in a single country. If you pay taxes in Germany, you can have relief from Gambia’s taxation and vice versa.
Other than that, there are no remittance taxes from the sender's side, but the receivers must pay taxes for foreign money. Usually, banks Use online remittance services such as ACE Money Transfer to help them avoid remittance taxes on the sender's side.
https://www.iamexpat.de/expat-info/taxation-germany/german-tax-system%C2%A0
https://www.expertsforexpats.com/country/other/germany/german-tax-for-expats/
