Migration and Taxation
Each year, a multitude of individuals make the journey to New Zealand. Whether migrating for retirement, starting a new life or establishing a business, many new Kiwis are drawn by the outlook of friendly communities and picturesque beaches.
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Yet, there is a layer of fiscal complexity that most are not fully aware of. Unbeknownst to many, significant taxes may apply when leaving certain countries. Double taxation agreements and the taxation of global income in New Zealand add to the complexity.
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No worries, though. Allow me to guide you through potential financial pitfalls. Having migrated to New Zealand twice and once to Australia, with company structures in New Zealand, Australia, Germany, and Malta, I've repeatedly navigated the legal landscapes. Now, I find myself in a unique position to assist migrants in finding peace of mind, ensuring they can rest easy at night. All earned by many sleepless nights of myself.
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I am not alone
The topics are too complex for one person. I've built a robust network of specialists in Germany and New Zealand. From tax lawyers to company structure experts, each is a leading authority in their field. As your single point of contact, I bridge communication with these experts, ensuring your needs are understood and the best solutions are achieved. Save valuable time and minimise the risk of critical mistakes with our comprehensive approach.
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Tax when leaving Germany
Departing Germany while still holding company shares can be a delicate matter. The German tax system interprets the act of leaving the country in a way that is similar to selling those shares at a very high valuation. This often results in a substantial tax liability known as "Wegzugssteuer," which can be financially burdensome, if not ruinous.
Mitigating this tax liability is possible, but it requires careful planning well in advance of relocating to New Zealand. Ensuring a smooth transition involves strategic foresight and proactive measures to navigate the German tax regulations.
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Property Income
Owning property and other assets in Germany during a move adds an additional layer of complexity. The intricacies of the involved tax regulations can be counterintuitive and often catch individuals by surprise. Rental income, for instance, is subject to different tax bases in Germany and New Zealand, leading to implications for double taxation.
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The misalignment of tax years between the two countries don't make things easier. Making costly mistakes is very easy in this scenario. Careful planning is crucial to avoid pitfalls.
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Foreign Investment Funds Rules
A heightened level of complexity arises when dealing with debt or capital left in Germany, such as mortgages or stock accounts. Currency fluctuations introduce an unexpected tax burden, especially when the amount of capital exceeds NZD 1 million in total. It's important to note that debt and credit are aggregated, even if the funds are situated in New Zealand.
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For instance, a mortgage of Euro 500k in Germany combined with a term deposit in New Zealand of NZD 300k might already surpass the NZD 1 million threshold. However, even smaller amounts can incur tax liabilities. Careful attention and a good understanding of the tax implications are needed to avoid unpleasant surprises.
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Company Structures
Early and thorough planning is paramount. The approach might involve transitioning German entities into an optimised structure and creating a tailored framework here in New Zealand. It is possible to optimise the tax structure without breaching any rules and regulations. However, this process is far from straightforward, and finding experts with experience in both, the German and New Zealand tax systems, can be a challenge.
Invole me early
Allow me to be of assistance. Early involvement is key to navigating the complexities associated with capital, company shares, or setting up a business in New Zealand. Whether you already have migrated or are still contemplating, a preliminary conversation can be immensely advantageous. Proactive discussions beforehand can potentially save you both trouble and substantial financial resources, ensuring that your transition is not only smoother but also optimised to maximise your financial well-being.