German taxation of foreign interest bearing account

[kiplette]

Right.

So Kid#3 has been to see the suggested (by her works union) Steuerberaterin from Steuerring who does seem to know the ins and outs of her work situation and what you can claim etc, which is good.

However when it comes to investments, she has not heard of the Vorabpauschale and does not believe it is a thing. The tax lady did not ask for kid#3's Freistellungsauftrag (which she forgot about in the horror of realising that the Steuerberaterin was less informed than her). She did show the lady her printed out bits of KAP-INV and the tax advisor had no idea what those were and asked where they came from

So kid#3 is a customer of this Steuerberater - if tax lady just files inexactly, ignoring the Vorabpauschale, then would this go horribly wrong for kid#3?

[PandaMunich]

The people at Steuerring (which is a Lohnsteuerhilfeverein) are not Steuerberater.
A Steuerberater is someone who has passed the Steuerberater exam: https://en.wikipedia.org/wiki/Steuerber ... BCfung%22)

The people at the Lohnsteuerhilfeverein are people who left school after grade 10, did a 3 year apprenticeship as a Steuerfachangesgestellte(r) and then opened an office of a Lohnsteuerhilfeverein.

They know a very small part of income tax law (EStG), i.e. the standard deductibles an employee can claim for, but do not expect them to know about investment tax law (InvStG = Investmentsteuergesetz), which is where she could read up on the Vorabpauschale, it's laid down in § 18 InvStG: https://www.gesetze-im-internet.de/invs ... /__18.html

--> There is a reason why Lohnsteuerhilfevereine are much cheaper than a Steuerberater.

So kid#3 is a customer of this Steuerberater - if tax lady just files inexactly, ignoring the Vorabpauschale, then would this go horribly wrong for kid#3?

Nope, she is a client of a Lohnsteuerhilfeverein.
Which wouldn't help her either, since in Germany, you yourself are responsible for any mistakes in your tax return.

Your daughter would only commit tax evasion if her total capital income (= interest + dividends + currency profit + profit from selling stocks/funds/bonds/options + Vorabpauschale) were over the savers' tax free allowance (Sparerpauschbetrag) of 1,000€.
Which I doubt.

So it doesn't really matter, except that a few years down the line, the Finanzamt will be informed about the non-German brokerage account by that other country's tax department and your daughter should at that point be able to prove that her capital income was really not more than 1,000€ per year, to avoid being accused of tax evasion.

[kiplette]

Thank you. I'll pass all of that on to her.