Germany - US tax treaty: Pay back after four years?!
I am a German citizen and have been living in the US for 2 1/2 years. I came here for Grad school and stayed to work for while. The tax treaty between Germany and the US implies that I can take advantage of the treaty so a specific amount of income is exempt from taxes. But then there is this paragraph:
"Individuals described in the previous two paragraphs are also exempt from U.S.
tax on compensation for dependent personal services of up to $5,000 per year if: they are
present in the United States for not more than 4 years, and the services are performed for
the purpose of supplementing funds available otherwise for maintenance, education, or
training.
If the individual’s visit exceeds 4 years, the exemption is lost for the entire visit
unless the competent authorities of Germany and the United States agree otherwise."
(Source: www.hauswiesner.com/Tax%20Treaty%20Germany_USA_Basics.pdf)
When I stay longer than four years, apparently I will have to pay taxes on all my income I made until then. My question is whether or not there will also be interest that I have to pay on top of that.
Any answers are greatly appreciated!
Thanks!
Sonja
"Individuals described in the previous two paragraphs are also exempt from U.S.
tax on compensation for dependent personal services of up to $5,000 per year if: they are
present in the United States for not more than 4 years, and the services are performed for
the purpose of supplementing funds available otherwise for maintenance, education, or
training.
If the individual’s visit exceeds 4 years, the exemption is lost for the entire visit
unless the competent authorities of Germany and the United States agree otherwise."
(Source: www.hauswiesner.com/Tax%20Treaty%20Germany_USA_Basics.pdf)
When I stay longer than four years, apparently I will have to pay taxes on all my income I made until then. My question is whether or not there will also be interest that I have to pay on top of that.
Any answers are greatly appreciated!
Thanks!
Sonja
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Tax Professional Answers
Manasa Nadig
Sonja,
Which article of the US-German Tax Treaty are you referencing?
Here is a link to the technical explanation of the treaty on the Internal Revenue Website: www.irs.gov/pub/irs-trty/germtech.pdf
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370 weeks ago
Which article of the US-German Tax Treaty are you referencing?
Here is a link to the technical explanation of the treaty on the Internal Revenue Website: www.irs.gov/pub/irs-trty/germtech.pdf