Model Proiect Taxation 1

7/25/2019 Model Proiect Taxation 1

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Contents

1.2.4 Local taxes
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1.1 General considerations regarding taxes and fees

A tax (from the Latin taxo; "rate") is a financial charge or other levy imposed upon a taxpayer (an

individual or legal entity) y a state or the functional e!uivalent of a state to fund various pulic

expenditures. A failure to pay or evasion of or resistance to taxation is usually punishale y la#.$axes are also imposed y many administrative divisions. $axes consist of direct or indirect taxes

and may e paid in money or as its laor e!uivalent. %e# countries impose no taxation at all such as

the &nited Ara 'mirates.

oney provided y taxation has een used y states and their functional e!uivalents throughout

history to carry out many functions. ome of these include expenditures on #ar the enforcement of

la# and pulic order protection of property economic infrastructure (roads legal tender

enforcement of contracts etc.) pulic #or*s social engineering susidies and the operation of

government itself. A portion of taxes also go to pay off the state+s det and the interest this det

accumulates. ,overnments also use taxes to fund #elfare and pulic services. $hese services can

include education systems health care systems pensions for the elderly unemployment enefits

and pulic transportation. 'nergy #ater and #aste management systems are also common pulic

utilities. -olonial and moderniing states have also used cash taxes to dra# or force reluctant

susistence producers into cash economies.

,overnments use different *inds of taxes and vary the tax rates. $his is done to distriute the tax

urden among individuals or classes of the population involved in taxale activities such as

usiness or to redistriute resources et#een individuals or classes in the population. /istorically

the noility #ere supported y taxes on the poor; modern social security systems are intended to

support the poor the disaled or the retired y taxes on those #ho are still #or*ing. 0n addition

taxes are applied to fund foreign aid and military ventures to influence the macroeconomic

performance of the economy (the government+s strategy for doing this is called its fiscal policy; see

also tax exemption) or to modify


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#ithin an economy y ma*ing some classes of transactionpatterns of consumption or

employment more or less attractive.

A nation+s tax system is often a reflection of its communal values and the values of those in current

political po#er. $o create a system of taxation a nation must ma*e choices regarding the distriution

of the tax urden #ho #ill pay taxes and ho# much they #ill pay and ho# the taxes collected #ill

e spent. 0n democratic nations #here the pulic elects those in charge of estalishing the tax system

these choices reflect the type of community that the pulic #ishes to create. 0n countries #here the

pulic does not have a significant amount of influence over the system of taxation that system may

e more of a reflection on the values of those in po#er.

Taxes in Germany

$he principal taxes applicale to companies in ,ermany are corporate income tax municipal trade

tax and value added tax (A$). 0n addition to the normal corporate income tax a surcharge of

corporate

ation. ther taxes include the municipal real estate

tax real estate transfer tax and customs and

excise duties. 'mployers have to ear a portion of the social security contriutions. ,ermany has

implemented the '& parent3susidiary interest and royalties and merger directives as #ell as the

'& savings directive the latter of #hich re!uires the exchange of information et#een tax

administrations #hen interest payments are made in one '& memer state to an individual residentin another memer state. $ax la#s are enacted y the lo#er house (undestag) of the ,erman

parliament. %ederal la#s relating to taxes re!uire the consent of the upper house (undesrat) if the

revenue accrues #holly or in part to the states or municipalities. $he states have po#er to legislate

#ith regard to local taxes on consumption and expenditure to the extent such taxes are not

sustantially similar to taxes regulated y federal la#. $hey are empo#ered to determine the rate of

the tax on the ac!uisition of real estate.

$he tax authorities may e authoried y a la# to

issue statutory instruments. $he %ederal inistry of %inance and the local upper tax authorities can

issue administrative decrees for guidance on certain aspects of the tax la#s. $he tax authorities at the

federal and state levels are in general responsile for collecting tax and enforcing the tax la#. $he

tax authorities are organied as federal state and local departments #ith different competencies

depending on the tax involved and the taxpayer concerned. 0n particular the local authorities are

competent for the collection of taxes ased on the residence of a taxpayer or the legal seat of an

entity. At federal level the %ederal -entral $ax ffice is competent for the administration of various

aspects of tax cases #ith international reference e.g. credit of or
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collection of information and international administrativeexemption from #ithholding taxes the

assistance.

1.2 Presentation of direct taxes

A direct tax is generally a tax paid directly to the government y the person on #hom it is imposed. 0n

a general sense a direct tax is one imposed upon an individual person (5uristic or natural) or

property (i.e. real and personal property livestoc* crops #ages etc.) as distinct from a tax imposed

upon a transaction. 0n this sense indirect taxes such as a sales tax or a value added tax (A$) are

imposed only if and #hen a taxale transaction occurs. 6eople have the freedom to engage in or

refrain from such transactions; #hereas a direct tax (in the general sense) is imposed upon a person

typically in an unconditional manner such as a poll3tax or head3tax #hich is imposed on the asis

of the person+s very life or existence or a property tax #hich is imposed upon the o#ner y virtue of

o#nership rather than commercial use.

-orporate tax or company tax refers to a tax imposed on entities that are taxed at the entity level in a

particular 5urisdiction. uch taxes may include income or other taxes. $he tax systems of most

countries impose an income tax at the entity level on certain type(s) of entities (company

or

corporation). any systems additionally tax o#ners or memers of those entities on dividends or

other distriutions y the entity to the memers. $he tax generally is imposed on net taxable

income. 7et taxale income for corporate tax is generally financial statement income #ith

modifications and may e defined in great detail #ithin the system. $he rate of tax varies y

5urisdiction. $he tax may have an alternative ase such as assets payroll or income computed in an

alternative manner.

Taxable income and rates

$he corporate tax rate is 189 plus a 8.89 solidarity surcharge #hich results in a comined rate of

18.:289. $rade tax typically at rates et#een 149 and 19 also is imposed.


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are taxed on certain ,erman3source income such as

income,erman taxation. 7onresident companies

from a ,erman permanent estalishmen

t.

Taxable income defined

All income of a corporation generally is considered usiness income. $here is no distinction et#een

capital gains and ordinary income. $axale income of a corporation is computed on the asis of the

annual accounts prepared in accordance #ith ,erman ,AA6 su5ect to certain ad5ustments for oo*

3tax differences tax3exempt and nondeductile items and other corrections (e.g. constructive

distriutions). %or tax years eginning after =1 >ecemer 2?12 corporations and other taxpayers

*eeping accounts have to sumit a standardied electronic version of their annual accounts including

a reconciliation of the oo*3tax differences or an electronic tax alance sheet and profit and loss

account (so3called e3alance sheet) #ith their (electronic) income tax return.

Deductions

0n general all expenses are deductile if they have een incurred as a result o usiness operations.

-ertain expenses may e disallo#ed (e.g. expenses related to exempt income income taxes and

interest paid to the government on late income tax payments) or may e deductile only up to a

limited amount.

Interest

,enerally the deduction of interest expense exceeding interest income (net interest expense) is

limited to =?9 of the taxale earnings efore net interest expense tax regular depreciation and

amortiation (tax '0$>A). $he limitation applies to all interest regardless of #hether the det

is o#ed to a

shareholder related party or third party. 'xcess interest may e carried for#ard indefinitely. An

'0$>A carry for#ard is generated if the taxpayer has net interest expense that is lo#er than =?9 of

the tax '0$>A. $he excess '0$>A may e carried for#ard and used in the follo#ing five years

#hen the net interest expense exceeds =?9 of the current '0$>A. $he =?9 limit does not apply

(#ith some related3party exceptions) #here@ (i) the annual net interest expense is less than '&< =

mil ii) the taxp

or (iii) the taxpayer demonstrates that the e!uity ratio of the ,erman orro#er does not fall short of

the e!uity ratio of the #orld#ide gro e

e!uity ratio is determined ased on the financial statements for the ,erman usiness at the end of the

previous financial year. A uniform accounting standard must e used for the ,erman usiness and

the
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group financial statements (primarily

0% ,AA6 or & ,AA6 as a last resort).

A threshold is calculated on the asis of the

current year '0$>A of the ,erman usiness (i.e. the year for #hich interest deductions should e

claimed). A tax group for ,erman tax purposes is treated as one usiness. 0nterest expense

exceeding the =?9 limitation is nondeductile for ,erman corporate income tax and trade tax

purposes (unless one of the exceptions applies) in the year of accrual ut may e carried for#ard.

$he interest carry for#ard is su5ect to change3in3o#nership rules (a direct or indirect o#nership

change of more than 2898?9 to one shareholder or a group of shareholders #ith similar

o5ectives) #hich could result in a partial or complete forfeiture of all interest carry for#ards.

0nterest expense disallo#ed under the interest deduction limitation #ill not trigger #ithholding

taxes ut may lead to doule taxation even #ithin ,ermany.

Depreciation

>epreciale or amortiale assets comprise fixed assets (tangile and intangile) #ith a useful life

exceeding one year and diminishing in value over time through #ear and tear. Land is not

depreciale. $he principal method of depreciation and amortiation is the straight3line method. $he

declining3 alance method is only applicale to movale fixed assets ac!uired or produced after =1

>ecemer

2??: and efore 1Banuary 2?11. Chere economically 5ustified movale fixed assets may e

depreciated according to the unit3of3production method. 0n the first year the annual depreciation or

amortiation is reduced y one t#elfth for each month that precedes the month of the ac!uisition or

production. Accelerated depreciation for exceptional #ear and tear resulting from technical or

economic causes is permitted only #hen the straight3line method is used. Ac!uisition or production

cost of movale fixed assets of up to '&< 18? (exclusive of A$) may e deducted immediately.

Chere the ac!uisition or production cost exceeds '&< 18? instead of capitaliing each asset the

taxpayer has the option to@

'ither record them individually and #rite them off immediately if the cost does not exceed

'&< 41? (exclusive of A$); or


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0ndustrial uildings are depreciated at a s

tr 18 years using the straight3line

method. -

aight3line rate of =9 per annum. ,ood#ill is amortied

over ertain additional types of depreciation are availale for

small

and medium3sied companies as a tax incentive.

0nventory may e valued at cost or if lo#er and impairment is expected to e permanent at

mar*et

value. Last3in first3out (L0%) is generally acceptale for tax purposes; other cost flo# assumptions

such as first3in first3out (%0%) are not allo#ed.

Crite do#ns due to impairment are only allo#ed if the value of the asset is expected to e

permanently lo#er. Crite do#ns of shares in corporations y corporate shareholders and on certain

shareholder loans are not tax deductile.

Provisions

,enerally the creation of provisions is tax deductile. %or certain types of provision restrictions

apply

e.g. for pension liailities provisions for anniversary onuses and onerous contracts and for

ac!uired provisions. %or tax purposes measurement of provisions may not ta*e into account future

increases of prices or costs. 6rovisions must e discounted y 8.89 unless their duration is less than

12 months at the alance sheet date. %or pension liailities a discount rate of D9 must e applied.

Losses

Losses up to '&< 1 million may e carried ac* one year for corporate income tax purposes. 7o

carryac* is availale for trade tax purposes. Losses not carried ac* can e carried for#ard

indefinitely. /o#ever utiliation of loss carry for#ards is restricted for annual profits exceeding

'&< 1 million. nly D?9 of the excess over '&< 1 million may e offset y the carry for#ard

losses. $he remaining 4?9 of taxale profits exceeding '&< 1 million is taxed at the regular

rates m taxa

ion rule applies for oth corporate income tax and trade tax purposes.

All corporate income tax and trade tax losses and loss carry for#ards are forfeited if more than

8?9 of the shares in the loss corporation are transferred directly or indirectly to one ac!uirer (or to

related parties of an ac!uirer) #ithin a period of five years. 0n the case of transfers of more than

289 ut less than 8?9 of the shares to one ac!uirer (or to related parties of an ac!uirer) #ithin a

five3 year period losses and loss carry for#ards are forfeited on a pro3rata asis. Ac!uirers acting in

concert are treated as one ac!uirer in applying the rule. $ransfers #ithin a group do not trigger loss

forfeiture

if the same person directly or indirectly o#ns 1??9 of the shares in the transferor and the transferee

company. Losses and loss carry for#ards also continue to e usale to the extent the loss corporation

has uilt3in gains #hich are taxale in ,ermany. Losses of a controlling entity or a controlled entity
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vel of the controlling entity the controlled entity or any otheraccount for foreign tax purposes at

the le person.

www2.deloitte.com German Guide Taxation 2015 edition

>ividends received y ,erman corporations or ranches of nonresident corporations generally are

exempt from corporate income tax regardless of ho# long the participation in the susidiary has een

held. /o#ever 89 of the gross dividend is added ac* to taxale income as a nondeductile

expense resulting in an effective tax exemption of E89. %or dividends paid after 2:%eruary
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2?1= the exemption re!uires

a minimu eginning of the calendar year

(ac!uisiti

m shareholding of at least 1?9 of the share capital at the

ons of 1?9 or more during the calendar year are deemed to

have ta*en place as at the eginning of that year). $he exemption is not granted to an*s financial

service institutions and financial enterprises including holding companies (in respect of

shares

ac!uired #ith the intention of realiing a short3term profit f

life and health insurance companies and pension funds unless the '& parent3susidiary directive or a

tax treaty provide other#ise. %or tax years eginning after =1 >ecemer 2?1= the exemption

generally is granted only insofar as the dividend has not een treated as a deductile expense at the

level of the distriuting company irrespec 3

$he E89 exemption also applies to trade tax #ith the restriction that a minimum shareholding of

189 of the share capital (1?9 for dividends from companies resident in other '& memer states) is

necessary at the eginning of the calendar year. %or dividends foutside the '& a minimum 189 shareholding must have een held since the eginning of the

calendar year in #hich the distriution ta*es place and the susidiary must meet certain activity

re!uirements. $ax treaty provisions prevail.

Profit tax Corporation tax! Gibraltar

-ompanies are taxed on income that is accrued in or derived from ,iraltar. ranches are taxed in

the same manner as companies. 7onresident companies are su5ect to tax on ,iraltar3source

income.

Taxable income

-orporation tax is imposed on a company+s profits #hich consist of usinesstrading income accrued

in and derived from ,iraltar. 0nvestment income from listed securities (except for an*s) is not

su5ect to taxation. 'xpenses incurred #holly and exclusively in the production of taxale income

may e deducted in computing taxale income. 0nterest received or receivale from intercompany

loans

Chere the interest received or receivale is less than ,6 1????? per annum the interest #ill not e

su5ect to taxation in ,iraltar unless the income falls #ithin the scope of trading income as #ould

e the case for an*s uilding societies etc. 0nterest receivale from all connected companies #ill

e
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e company receiving the income is registered in

,iraltar.

Taxation of dividends@ >ividends are not su5ect to taxation

$he ,erman civil code regulates employment contracts. $he commercial code partly covers the

employer3employee relationship and contains regulations on commercial agents.

$he rate of income tax in ,ermany ranges from ?9 to 489. $he ,erman income tax is a progressive

tax #hich means that the average tax rate (i.e. the ratio of tax and taxale income) increases

monotonically #ith increasing taxale income. oreover the ,erman taxation system #arrants that

an increase in taxale income never results in a decrease of the net income after taxation. $he latter

property is due to the fact that the marginal tax rate (i.e. the tax paid on one euro additional taxale

income) is al#ays elo# 1??9.

$he asic allo#ance

eyond this threshold the marginal tax rate increases linearly from 149 to 249 for a taxale income

change of rates occurs at

marginal tax rate 5umps from 429 to 489.

n top of income tax the so3called solidarity surcharge (olidaritFtsuschlag) is levied at a rate of

8.89 of the income tax for higher incomes.

,erman social insurance is a statutory system that comprises@

/ealth insurance@ ,enerally all individuals resident in ,ermany are oliged to ta*e out

health insurance. 'mployees #ith annual gross salaries of up to '&< 84E?? (2?18) must e

enrolled

in the pulic sector health insurance scheme. $he monthly contriutions of 14.D9 of gross

monthly salaries (up to a salary ceiling of '&< 4128) are divided e!ually et#een employer

and employee #ho each contriute .=9. %rom 1 Banuary 2?18 pulic health insurance

providers can charge additional monthly contriutions #hich have to e orne y the

employee


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(currently

et#een ?9 and 1.=9 exceeds

the '&< 84E?? ceiling

of gross monthly salaries). 'mployees #hose gross salary

for compulsory pulic sector health insurance may choose

et#een the pulic sector and a private health insurance scheme. $hese employees may claim

from their employer an allo#ance for their health insurance that corresponds to the .=9

share

(pulic sector health insurance) or amounts to half of the contriutions to a private health

insurance scheme up to a maximum of '&< =?1.1= per month.

7ursing care insurance@ %or employees #ith children #ho are insured under the pulic sector

health insurance scheme the monthly contriutions from 1 Banuary 2?18 are 2.=89 of gross

monthly salary (up to a salary ceiling of '&< 4128). 'mployers and employees each pay

one3 half of the contriutions (except in axony #here employees are re!uired to pay

1.D89 and

employers ?.D89). 'mployees #ithout children #ho are insured under the pulic sectorhealth insurance scheme pay an additional contriution of ?.28 percentage points #hich is

not shared y the employer. $his extra contriution does not apply to persons under the age

of 2= persons orn efore 1 Banuary 1E4? or persons currently in military or civil service. 0f

the employee has opted for private health insurance heshe must also ta*e out private nursing

care insurance. 'mployees may claim from their employer an allo#ance for their private

nursing care insurance that amounts to half of the contriutions restricted to a maximum of

'&< 4:.4 per month ('&


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"alary Tax Italy

0ndividuals #or*ing in 0taly are generally su5ect to social security contriutions.


13/21

tion of road tax on ne# cars registered after the 1st Banuary$here are t#o components to

the calcula 2?12@

'ngine sie

engines

-2

emissionsengines emitting less than 11? gms*m are exempt and the tax aove that

.

%otor ve&icle and vessel tax in C&ina

At this moment this tax is only applied to the enterprises #ith foreign investment foreign

enterprises and foreigners. $he users of the taxale vehicles and vessels are taxpayers of this tax.

$he tax amount per unit is different for vehicles and vessels@

a.$ax amount per unit for vehicles@ 183:? yuan per passenger vehicle per !uarter; 4318 yuan per net

tonnage per !uarter for cargo vehicles; 832? yuan per motorcycle per !uarter. ?.=3: yuan per non3

motored vehicle per !uarter.

.$ax amount per unit for vessels@ ?.=3 1.1 yuan per net tonnage per !uarter for motoried vessels;

?.183?.=8 yuan per non3motoried vessel.

$he tax ase for vehicles is the !uantity or the net tonnage of taxale vehicles. $he tax ase for

vessels is the net3tonnage or the dead#eight tonnage of the taxale vessels. $he formula for

computing the tax payale is@

a. $ax payale G Huantity (or net3tonnage) of taxale vehicles I Applicale tax amount per unit .

$ax payale G 7et3tonnage (or dead#eight tonnage) of taxale vessels I Applicale tax amount per

unit $ax exemptions may e given on the vehicles used y 'massies and -onsulates in -hina; the

vehicles used y diplomatic representatives consuls administrative and technical staffs and their

spouses and non3gro#n3up children living together #ith them.

$ax exemptions may e given as stipulated in some provinces and municipalities on the fire vehicles

amulances #ater sprin*ling vehicles and similar vehicles of enterprises #ith foreign investment and

foreign enterprises.
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1.'Presentation of indir ect taxes

An indirect tax (such as sales tax a specific tax value added tax (A$) or goods and services tax

(,$)) is a tax collected y an intermediary (such as a retail store) from the person #ho ears the

ultimate economic urden of the tax (such as the consumer). $he intermediary later files a tax return

and for#ards the tax proceeds to government #ith the return. 0n this sense the term indirect tax is

contrasted #ith a direct tax #hich is collected directly y government from the persons (legal or

natural) on #hich it is imposed. ome commentators have argued that "a direct tax is one that cannot

e shifted y the taxpayer to someone else #hereas an indirect tax can e."

An indirect tax may increase the price of a good so that consumers are actually paying the tax y

paying more for the products. 'xamples #ould e fuel l i!uor and cigarette taxes. An excise duty on

motor cars is paid in the first instance y the manufacturer of the cars; ultimately the manufacturer

transfers the urden of this duty to the uyer of the car in form of a higher price. $hus an indirect tax

is such #hich can e shifted or passed on. $he degree to #hich the urden of a tax is shifted

determines #hether a tax is primarily direct or primarily indirect. $his is a function of the relative

elasticity of the supply and demand of the goods or services eing taxed.

"ales Tax

6eople shop every day for groceries clothing electronics and household goods. At the cash register

#e are given a total that includes a percentage of our purchase usually et#een 4 and 1? percent

that is a sales tax. $his added fee is then collected and sumitted to local state and federal agencies

#here it is disursed to a variety of programs and pro5ects. 'veryday items are not the only ones that

incur sales taxes. Larger tic*et items such as vehicles and homes are su5ect to the same form of

taxation. ervices are susceptile to sales tax as #ell. %or instance if a repair person enters a home

for the purpose of fixing the pluming or any other home repair the parts used to ma*e the repair

demand a sales tax. ften people are taxed on the #hole ill oth parts and service.

Customs Tax

-ustoms taxes are applied to imported and exported products. $hese taxes are determined y the

cities and states that house seaports. 6eople are usually una#are of the taxes associated #ith

imported and exported goods though all consumers pay them regardless of ho# much income they

earn. anufacturers and merchants pass along higher prices to consumers to offset the taxes they

must pay #hen uying or selling ra# materials or finished goods.
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15/21

(xcise Tax

'xcise taxes are placed mostly on ra# materials and paid for y manufacturers at the initial stage.

%or manufacturers this tax is simply a cost of doing usiness. $o help offset the costs they pass

them to consumers on the finished goods. $his creates another layer of indirect taxes that the average

consumer pays.

Gas Tax

,as tax is another indirect tax that consumers pay #henever

they uy gasoline for their vehicles. ,as taxes are uried in the price per gallon. $hey include state

and federal taxes.

alue added tax (A$) is a sales tax levied at each stage of the production and distriution chain.

0n general A$ is charged on most supplies of goods and services y an entrepreneur in the course of

a usiness activity carried out in ,ermany on intra3'& ac!uisitions certain other receipts of

supplies and on imports of goods from outside the '&. 0t is normally collected from the entrepreneur

ma*ing the supply ut passed on to the customer y adding it to the purchase price. 0n some cases

the receiving entrepreneur or legal entity is liale to tax (under the reverse charge mechanism). 0n

the chain of entrepreneurs A$ generally should e tax neutral at each stage until the goods or

services reach the final customer (or are used for tax3exempt supplies). $he tax is largely

harmonied #ithin the '&.

$he standard rate of A$ in ,ermany is 1E9 #ith a reduced rate of 9 applying to certain consumer

goods and everyday services (such as food oo*s magaines and ne#spapers entertainment local

pulic transport and hotel accommodation). ome supplies are ero3rated or tax exempt. Jero3rating

(exemption #ith input tax recovery) mainly applies to intra3'& supplies exports to non3'& countries

and cross3order transports of goods to and from non3'& countries.

'xempt activities (no input tax recovery) include most financial insurance and universal postal

services; transfers and letting or leasing of immovale property; services lin*ed to health and social

#elfare #or* and certain educational and cultural services. 0n some cases the entrepreneur may opt

for taxation of exempt supplies. mall entrepreneurs resident in ,ermany are exempt from A$ if
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16/21

their total turnover (excluding certain ex

em year and is expected not to exceed

'&< 8

pt supplies) has not exceeded '&< 18?? in the previous

???? in the current year. $hey may opt to e taxedunder

the

normal rules. $he A$ liaility of a taxale entrepreneur is computed y deducting recoverale

input A$ from total output A$. An excess of input over output A$ is refunded. -ertain

formal

re!uirements need to e met for the deduction of input A$ e.g. concerning the content of the

invoice.

$he tax assessment period for A$ is the calendar year. /o#ever entrepreneurs must usually file

preliminary returns on a monthly asis. Huarterly returns are made #here the A$ payale in the

preceding calendar year did not exceed '&< 8??. 7o preliminary returns are necessary #hen the

A$ payale did not exceed '&< 1??? in the preceding calendar year. 6reliminary returns must e

sumitted electronically and the A$ due must e paid #ithin 1? days after the end of the filing

period. A one month filing and remittance extension is granted if in the case of a monthly filing

repayments is made. $he annual return has to

e filed y =1 ay of the follo#ing year (a filing extension may e otained). Chen a professional

tax advisor prepares the return the due date is automatically extended to =1 >ecemer of the

follo#ing year; ho#ever the tax authorities may re!uest that the taxpayer file the tax return earlier.

,enerally

the tax is self3assessed. 6ayment of the A$

liaility from the annual return if any is due one month after sumission of the return. Additional

reporting oligations may exist in respect of intra3'& supplies of goods or services (filing of a

'uropean ales List and 0ntrastat declaration).

7onresident entrepreneurs i.e. entrepreneurs

#ho do not have a registered office place of management or fixed estalishment in ,ermany must

register for A$ purposes and file A$ returns if they ma*e supplies in ,ermany #hich do not fall

under the reverse charge regime. $he reverse charge regime is applicale among others to #or*

supplies and services of nonresident entrepreneurs to (resident or nonresident) entrepreneurs or legal

entities (including those under pulic la#). &nder the regime the person #ho receives the supply is

oliged to pay the A$ to the tax authorities. $he reverse charge mechanism does not apply #here

the supplies or services are made to private persons.

7onresident entrepreneurs #ho are not and

need not e registered for A$ purposes and therefore do not file A$ returns may apply for a

refund of input A$ via a special refund procedure. %or nonresident '& entrepreneurs the

application must e sumitted electronically in the '& country of residence no later than =?

eptemer follo#ing the calendar year to #hich the refund claim relates. 7onresident entrepreneurs

from outside the '& must sumit their a lication to the %ederal $ax ffice =? Bune follo#in the
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17/21

reciprocity i.e. the other 5urisdiction

mus or not levy A$ or a similar

tax. $he refu

t operate similar refund procedures for ,erman

entrepreneurs nd claim must e at least '&< 8? ('&< 8??

for nonresident

entrepreneurs located outside the '&) if the period for #hich the refund is claimed is the calendar

year or the last period of the calendar year other#ise a minimum of '&< 4?? is re!uired ('&igital cameras and ideo ,ame consoles are duty free. -ertain

goods may e su5ect to additional duties depending on the country of manufacture for example

icycles made in -hina carry an additional (anti3dumping) duty of 4:.89.

$he standard A$ rate for importing items into ,ermany is

1E9 #ith certain products for example oo*s ne#spapers and magaines attracting A$ at the

reduced rate of 9. A$ is calculated on the value of the goods plus the international shipping costs

and insurance plus any import duty due.

%or imports into ,ermany there are minimum

thresholds elo# #hich duty and A$ are #aived. >uty is not charged if@

the % value i.e. the value of the goods

excluding shipping and insurance cost does not

A$ is not charged if@

the % value i.e. the value of the goods

excluding shipping and insurance cost does not

oth duty and A$ are #aived if@ther taxes and customs fees@ 'xcise duty is payale on for example toacco and alcohol. Additional

customs fees can e charged to cover the expense of performing any re!uired examinations

verification and or testing of the imported goods.

Custom Taxes in "out& $frica

0mport duty and taxes are due #hen importing goods into outh Africa #hether y a private

individual or a commercial entity. $he valuation method is % (%ree on oard) #hich means that

the import duty and taxes payale are calculated exclusively on the value of the imported goods.

/o#ever some duties are ased part in value and part in !uantity. 0n addition to duty imports are

su5ect to sales tax
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19/21

(A$). -ertain luxury or non3essential item

duties and some commodities may e su

s (e.g. perfume) may e su5ect to additional ad valorem

5ect to anti3dumping or countervailing duties.

>uty rates in outh Africa vary from ?9 to 489 #ith an average duty rate of 1:.49. ome

goods are not su5ect to duty (e.g. laptops electric guitars and other electronic products).

A$ applies to most imports at 149 of the sum of % value any duty and excise payale and

a 1?9 upliftment of the % value. $here is no minimum threshold in outh Africa i.e. duty A$

and other taxes #here applicale are payale regardless of the import value.

Anti3dumping and countervailing duties are levied@

on goods considered to e "dumped" in outh Africa;

and on susidied imported goods.

$hese goods are the su5ect of investigations into pricing and export incentives in the country of

origin; the rate imposed #ill depend on the result of the investigations. $hese duties are either levied

on an ad valorem asis (as a percentage of the value of the goods) or as a specific duty (as cents per

unit).

(nvironmental taxes

$axes levied on oil natural gas and electricity provide

re to the state3run social security system.

Insurance premiums

$he standard tax on general insurance premiums is 1E9

(xcise duties in Germany

'xcise tax in ,ermany is a type of tax charged on goods produced #ithin the country (as opposed to

custom duties charged on goods from outside the country). $ypical examples of excise duties are in

,ermany on gasoline toacco and alcohol. 'xcise duty is also a tax levied on the producer of these

goods. 0n ,ermany is it a separate tax from A$ and is different from it in that A$ solely affects

the consumer. $he consumer also indirectly pays the excise as it is included in the eventual sale

price of the product.
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20/21

Beerinimum excise duty in '& is ?.4: '&< per htdegree 6lato of finished product (Article D of

>irective E2:4''-). 0n ,ermany is ?.: '&< per hldegree 6lato of finished product 6lato. 0n

,ermany are the reduced rates@

under 8 ??? hl the rate is ?.44? '&< per htdegree 6lato

under 1? ??? hl the rate is ?.82:: '&< per htdegree 6lato

under 2? ??? hl the rate is ?.D1? '&< per htdegree

6lato under 4? ??? hl the rate is ?.DD1? '&< per

htdegree 6lato

$he rate y '& la# may not e set more than 8? elo# the

standard national rate.

$he rate in ,ermany is 1=D '&< per hectoliter spar*ling #ine and 81 '&< per hectoliter per still3

spar*ling #ine (not exceeding :.8 9).

$he rate in ,ermany is 1=D '&< per hectoliter and 81 '&< per hectoliter y other still fermented

everages (not exceeding :.8 9).

inimum excise duty in '& is 48 '&< per hectoliter of product (Article 1 of >irective E2:=''-).

0n ,ermany is the rate 18= '&< per hectoliter of product (y product #ith alcohol from 18 9 to 22

9 vol.) and 1=D '&< per hectoliter of product (y product #ith alcohol up 18 9 vol.).

inimum excise duty in '& is 88? '&< or 1??? '&< per hectoliter of pure alcohol (Article 2? of

>irective E2:=''-). 0n ,ermany is the rate 1=?= '&< per hectoliter of pure alcohol the reduced

rate is =? '&< per hectoliter. $he rate y '& la# may not e set more than 8? elo# the standard

national rate.

-igarettes

$he tax rate is :2.? '&< per 1??? pieces.

-igars and -igarillos

$he tax rate is 14 '&< per 1??? pieces.

%ine cut smo*ing toacco$he tax rate is =4.?D '&< per 1??? pieces.

ther smo*ing toaccos

$he tax rate is 18.DD '&< per 1??? pieces.

inimum excise duty in '& is 421 '&< per 1??? liter. 0n ,ermany is the rate 21 '&< per 1???

liter.


21/21

(nvironmental taxes in "out& $frica

7e# passenger motor vehicles #ith caron dioxide (-2) emissions in excess of 12?g*m and motor

vehicles used for the transportation of goods #ith -2 emissions exceeding 18g*m manufactured

in or imported into outh Africa attract a -2environmental levy. $he -2 emission levy is not

payale on motor vehicles that can transport 1? or more persons or ne# motor vehicles manufactured

and cleared for home consumption for the follo#ing purposes@

cles;

3road logging truc*s and road tractors;

ally disaled persons or adapted or toe adapted for the transport of physically disaled persons;

to e adapted to e driven solely y a physically disaled person;

and representatives.

)arious levies "out& $frica

$he %inancial ervices oard imposes various levies on financial institutions. >onations (gift) tax is

payale y a donor at a rate of 2?9 of the value of property donated y outh African residents

(nonpulic companies) su5ect to certain exemptions. $here are exemptions for donations up to

JA< 1???? prorated per year of assessment in the case of donors other than individuals.
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Model Proiect Taxation 1

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