The government charges duty on goods while importing and exporting them and charges for doing financial transactions. It imposes on particular people and companies, which use imports or exports for goods. Every country has different rates of duty. Let’s Know more about Duties And Taxes Calculator of Germany
Types of Duties:
- Custom Duty;
Customs duty is a tax that is levied on goods that are imported or exported outside of Germany and non-EU countries. It is charged from those companies and individuals of Portugal who do exports.
- Excise Duty;
It is a tax that has been levied on goods manufactured in Germany. It is on the production of domestic goods, sale, and license.
- Stamp Duty;
Stamp duty means the tax that has charged by the buyers of properties. It applies to real estate documents, deeds, contracts, transactions, etc.
What is tax?
Taxes are charged by the government of a country, from all people. Every country charge different amount of tax from its people. It helped in funding public services and for the betterment of society.
Types of Taxes:
- Income Taxes;
A tax that the government imposed on the income of its people, either they earn from businesses or jobs or other ways. It is mandatory for citizens of Germany, ex-pats, and foreigners earning in Germany.
- Property Taxes;
When land is owned by a person or a legal entity then it must pay its annual tax to the government. It varies according to the value of your property.
- Progressive Taxes;
The high tax burden is on rich families, and the low tax burden is on middle or lower-class families is called progressive taxes.
- Consumption Taxes;
This tax is charged by a person while purchasing items or taking services. Like how much money a person spent on their businesses or while purchasing goods.
How are Duties and Taxes calculated in Germany?
Germany is among the partners of the European Union Common Customs Tariff (EUCCT). The countries of the European Union have Value Added Tax (VAT) for goods and services. But the USA, Canada, New Zealand, Singapore, and Australia called it GST. In other countries, it is called different.
Duties;
- Duties taxes in Germany are calculated by adding Ad Valorem on the Cost, Insurance, and Freight (CIF) value of items.
- All goods can be imported into Germany except illegal. And there is a restriction on alcohol, alcoholic beverages, and tobacco.
- Their duty rates start from 0-19%. As if a person coming from non-EU and bringing with him goods worth euro 430, will not pay any duty.
- If you live close to a non-EU country border and work as a lorry driver or tour driver, then you may bring goods to Germany duty-free, but without exceeding their value.
- If a traveller from a non-EU country comes to Germany and brought goods, worth exceeding the limits, then he must give duty.
- A person who lives in a non-EU country can import a vehicle that is non-EU registered under relief and may use it in Germany.
- In Germany, there is an excise duty on alcohol, alcoholic beverages, electricity, energy products, mineral oils, coffee, and tobacco.
Taxes;
INCOME TAX:
- A resident of Germany and expats has to pay income tax throughout the year. And if a foreigner lived in Germany for 95 days or more then you will also be considered a resident, and you must pay tax.
- The vast majority of Germans pay it through payroll, as it cuts from their monthly salary.
- The rates of income tax set by the federal government of Germany and applied to people’s wages are:
Less than 9.984 € have no tax, from 9.984-58.596 € should pay 14% to 42%, from 58.597-277.825 € should pay 42%, and wages more than 277.825€ must pay 45% of tax.
PROPERTY TAX:
- The property tax in Germany has divided into two, real property taxes and constructible property taxes.
- Real property taxes are for agricultural land and industries. And constructible property taxes are for buildings and development.
- This tax burden rate is calculated by multiplying the real property tax rate with the actual value of the property. Their tax rate starts from 0.26% to 1%.
VAT in Germany:
- VAT in Germany is an exchange of goods within European countries. It is the tax rate of goods and services.
- There is also no tax on international transport. And the non-EU traveller can purchase anything without tax.
- Their standard VAT rate is 19%. But there are different rates for many goods and services.
- They set the different rates by including the VAT of 19%: gross price/1.07 *0, 07= included VAT.
- Some goods and services that have a VAT rate of 7% are local public transport, newspapers, books, medical equipment, sports events, medical dental, hotel accommodation, plants, and agricultural goods.
- To calculate the VAT rate of 7%; the net price*1.07=gross price (VAT included).
CONCLUSION:
Germany is a country where there is not much tax burden on people. Hence, they are compulsory to pay. The federal government of Germany takes these taxes, which increases revenues. And they used this sum of money to fulfil the responsibilities of people by providing utility services. The government provides you with all these public transport, development of country infrastructure, protection of domestic industries, etc.
