What to Do With German Shares When Moving to Another EU Country?

Question from El, What to Do With German Shares When Moving to Another EU Country?

Answer from AI:

When you, as an EU citizen, decide to relocate from Germany to another EU country like Greece and you hold shares in a German GmbH (Gesellschaft mit beschränkter Haftung), there are several tax-related actions you should consider taking to ensure compliance with German tax laws.

Informing the German Tax Office

Notify the German Tax Office of Your Move

• It is important to inform the local Finanzamt (German Tax Office) of your departure. This can be done by submitting an Abmeldung, which is the official deregistration form.
• Even after you leave Germany, you may still have tax obligations there, especially if you continue to hold shares in a GmbH.

Understanding Tax Obligations for Shareholders

Capital Gains Tax

• If you sell your shares in the GmbH while you are a tax resident in another country, Germany may still have the right to tax the capital gains, depending on the double taxation agreement between Germany and your new country of residence.
• It is crucial to understand the tax treaty between Germany and Greece to determine your tax liabilities.

Dividends

• Dividends received from the GmbH may be subject to withholding tax in Germany.
• The double taxation agreement may provide for a reduced rate of withholding tax or a credit against the tax due in your new country of residence.

Consulting with Tax Professionals

Seek Professional Advice

• Given the complexity of tax laws and treaties, it is advisable to consult with a tax professional who is knowledgeable about both German and Greek tax systems.
• A tax advisor can help you understand your ongoing tax obligations and assist with filing any necessary declarations or returns.

Keeping Accurate Records

Maintain Documentation

• Keep detailed records of your share ownership, any dividends received, and any capital gains or losses from the sale of shares.
• Documentation is essential for tax reporting and for proving tax residency in your new country.

Understanding the Impact of EU Regulations

EU Regulations

• The EU has regulations in place to ensure the free movement of capital, which includes investments such as shares in companies.
• However, tax matters are largely governed by individual member states and their bilateral treaties.

In summary, when relocating to another EU country, you should notify the German Tax Office of your move, understand your tax obligations for capital gains and dividends, seek professional tax advice, maintain accurate records, and be aware of the impact of EU regulations on your investments. For more information on tax obligations for shareholders in Germany, you can visit the Federal Central Tax Office website.

Remember, this information is general in nature and should not be considered as specific legal or tax advice. It is always recommended to consult with a legal or tax professional for personalized guidance.