Income tax (ESt) – tax for natural persons

Income tax – ESt for short – is usually levied on the income of natural persons, according to their ability to pay. Income is understood as the sum of all income earned within the meaning of the Income Tax Act (EStG) minus the sum of all deductions relevant under tax law – such as any allowances. Taxable individuals are divided into self-employed persons, who generally have to pay their income tax themselves, and employees, whose income tax is withheld by their employer in the form of wage tax and paid to the tax office on their behalf.

Other taxes for businesses:

• Corporate income tax (KSt)
• Capital gains tax (KapESt)
• Value added tax (VAT)
• Trade tax (GewSt)

If you want to learn more specifically about taxes for real estate companies, you can learn more here:

• Save taxes on real estate

Income tax in detail – collection, levy & tax liability

As a joint tax, this tax revenue is divided between the federal, state and local governments. The municipalities receive the rate applicable under federal law – currently 15 percent of wage tax and assessed income tax – while the remainder goes to the federal government and the states in equal shares. Overall, all natural persons are generally liable to income tax and must pay tax on their income derived from self-employed and non-self-employed activities. The basic principles of income tax law are as follows:

• Net principle
• Periodicity principle
• World Income Principle
• Principle of differentiated rates
• Ability-based taxation

Individuals resident in Germany are subject to unlimited tax liability; individuals resident abroad who earn income in Germany are subject to limited tax liability.

Allowance for low earners & Deductible business expenses

Natural persons with low income can use an allowance for themselves up to a current amount of 9,168 euros – this applies to both income from self-employment and income from non-self-employment. Entrepreneurs with income tax liability can also declare the following deductible business expenses in order to reduce their profits and, as a result, their taxable income:

• Rental costs
• Car costs
• Personnel costs
• Depreciation
• Deductible input tax
• Sales tax paid
• Purchases of goods & services
• Expenses for low-value assets

Which companies are subject to income tax?

Most natural persons are charged with income tax. Therefore, this type of tax is particularly relevant for sole proprietorships (EU) and BGB companies (GbR). In addition, general partnerships (OHG) and limited partnerships (KG) are usually subject to income tax. However, income tax may also be obligatory for a limited liability company (GmbH) or a stock corporation (AG), if applicable.

Partnerships such as the general partnership (OHG) or the limited partnership (KG) are generally not subject to corporation tax or income tax, but the natural persons and legal entities with partner status belonging to them are. The profit generated by the partnership is subject to uniform and separate determination and is allocated directly to the individual partners in accordance with their legal form: Legal entities must charge their profit shares to corporation tax, natural persons to income tax.

• Partnerships: Natural persons with profit shares

Overview of company law forms

You can find more information about the different legal forms under the following links. Starting with the sole proprietorship and the registered traders… to the various partnerships and corporations… to other companies such as the family foundation – all the essential aspects of formation, liability, tax burden and more explained simply and understandably! First of all, an overview of the individual legal forms of companies:

• Sole proprietorship (EU)
  • Freelancer
  • Small business
  • Registered traders (e. K.)
• Silent partnerships
• BGB companies / civil law partnership (GbR)
• Partnerships
  • Limited partnership (KG)
  • General partnership (OHG)
  • Limited Liability Company and Company Limited Partnership(GmbH & Co KG)
  • Limited Liability Company and Compagnie General Partnership(GmbH & Co OHG)
• Corporations
  • Stock corporation (AG)
    • AG & Co KGaA
  • Partnership limited by shares (KGaA)
  • Limited liability company (GmbH)
    • GmbH & Co KGaA
  • Entrepreneurial company / UG (limited liability)
  • European Company / Societas Europaea (SE)
    • SE & Co KGaA
• Other companies
  • Foundations / Family Foundations
  • Insurances
  • Partnerships
  • Registered associations (e. V.)
  • Registered cooperatives (e. G.)

Taxes in Germany: List

Corporation tax (KSt), income tax (ESt), capital gains tax (KapESt), turnover tax (USt), trade tax (GewSt) – who pays what? In this overview of the different types of taxes / tax forms in Germany, you will find relevant taxes for you as an individual and for your business, depending on which legal form you have chosen. Also, after the tax list: How does the tax cycle work around month-end closing, year-end closing and balance sheet? A little insight for those starting their first company. What taxes are there? Simple explanations, definitions, tax optimization, an insight into taxes.

• Taxes: List

Der Beitrag Income tax (ESt) simply explained: forms, basic table, wage tax & Co. erschien zuerst auf ℄ Real Estates.

The testator is free to decide how much he wants to bequeath to whom

The testator is completely free to decide what should happen to his assets after his death. However, in order for a will to be truly valid, it is important that the testator is familiar with the specifics of drafting a will. Small mistakes in the wording can already lead to parts of the will not being interpreted correctly or not being valid in the first place. For this reason, it is of absolute necessity that the will is legally unambiguous.

Facts about the compulsory part

Close relatives cannot be completely excluded from the testator’s inheritance. Even in the event of disinheritance, which was agreed in the will, the relative can sue for the statutory compulsory portion. Incidentally, disinheritance can be effected without giving reasons.

Therefore, it does not make sense for the testator to disinherit a person who is entitled to the compulsory portion. This only leads to disputes. Inherited is nevertheless.

The compulsory portion is half of the statutory share of the inheritance. The compulsory portion is not automatically awarded to the heir by the probate court. The compulsory portion is also not noted in the certificate of inheritance. This means that the compulsory portion must first be claimed by the beneficiary of the compulsory portion from the other heirs.

However, there are special circumstances in which the testator is entitled to disinherit the child in such a way that the child cannot inherit the compulsory portion. This is the case if the child has been sentenced to a prison term of at least one year without probation for a criminal offence.

If a child is also to be deprived of the compulsory portion, the testator must record the motives in the will. Another legally valid reason is when the beneficiary of the compulsory portion seeks the life of the testator or another close person. If the beneficiary of the compulsory portion is guilty of a crime such as theft or bodily harm against the testator, he or she may also be deprived of the right to the compulsory portion.

Entitled to a compulsory share?

But which persons count as next of kin and are therefore entitled to a compulsory portion? This includes children. It does not matter whether they are biological or adopted children. If the testator was married at the time of death, spouses also count as close relatives. The same applies to a registered civil partnership. If the deceased has no children, the parents count as close relatives. Siblings of the deceased, on the other hand, are not entitled to a compulsory share.

The heir’s compulsory portion may be increased if the testator made gifts to other relatives up to ten years before his or her death. This is a claim to a supplement to the compulsory portion. This is the case, for example, if the testator gave away a property five years before his death. The beneficiary of the compulsory portion can demand that the compulsory portion is now calculated as it would have been if the gift had not been made. His or her compulsory portion increases as a result.

It should be noted that the beneficiary of the compulsory portion is not the owner of the estate. He therefore has no say whatsoever in what is to be done with the estate.

The legal succession must also be observed in the will if it is not to lose its validity. If the succession was not observed by the testator, the person concerned can enforce his or her claims in court.

If the claim to the compulsory portion is not asserted within 3 years after the death of the testator, the claim loses its validity. In addition, the claim to the compulsory portion only becomes valid when the testator has died. The compulsory portion cannot be claimed during the lifetime of the testator.

Inheritance and bequests: Compulsory portion

Calculate compulsory part – instructions

Legal succession in the case of inheritance

Legal succession always applies if the testator has not made a will. If there are no relatives, the inheritance passes to the state. However, this is hardly ever the case in Germany.

In the law of succession, kinship is divided into different degrees of order.

If heirs of order I exist, heirs of order II are completely excluded.

The children of the deceased as well as the grandchildren belong to the degree of order I. The children inherit in equal shares. If one of the children is already deceased, his or her children inherit.

Second cousin

If a deceased dies leaving neither children nor grandchildren, the second-degree relatives inherit. These include the parents of the deceased and the siblings. If a sibling has already died, the inheritance passes to their children, the nieces and nephews. If there are no second-degree relatives, the third-degree relatives are the grandparents and their children. These are then the aunts and uncles and the cousins.

Spouse

If no marriage contract has been agreed and the principle of community of accrued gains applies, the spouse of the deceased receives half of the inheritance alongside the children. In addition to the parents and siblings, the spouse even receives three quarters of the inheritance.

This can become dangerous if, for example, a property is inherited. In this case, the spouse has no sole claim to the property. In order to avoid this problem, many spouses opt for the Berlin will.

Berlin will

In a Berlin will, the longer-living spouse inherits everything. The children are excluded as heirs. Only after the death of the second spouse does the inheritance pass to the children. In this way, the property passes to the spouse without an inheritance dispute. However, even in this case, children can override the testator’s last will and claim the compulsory portion.

To prevent this from happening, the will can be amended to include a penalty clause in the event that the compulsory portion is claimed. However, this usually does not have the desired effect of the testator. Children can nevertheless claim their compulsory portion after the death of one parent. However, this becomes economically less attractive, as the inheritance is higher after the death of the second parent.

Parents are not obliged to treat their children equally in their wills

Parents are not obliged to treat their children equally in the will, even if this could avoid disputes after death. However, it is not possible to bequeath certain items of the estate only to certain children. For example, that the first child should inherit only the real estate, while the second child should become heir to the securities. Instead, it is only possible to determine with which quota the individual child receives how much of the total inheritance.

Will and custody

For the testator’s will to be valid, it must be handwritten and, of course, signed. It is absolutely fatal to type the will on the computer for the sake of better legibility. Even if it is signed, it is not valid.

Most testators choose to keep their wills at home. However, this carries the risk that it will be lost, cannot be found after death or that one of the heirs will make it disappear if it falls into their hands and disadvantages them.

It is therefore more advisable to place the will in the care of the probate court. This ensures that the will will be used in any case after the death of the testator. Anyone who decides against this form of safekeeping would do well to inform a trustworthy person about the existence and location of the will.

Der Beitrag Inherit properly: What to consider when inheriting and bequeathing erschien zuerst auf ℄ Real Estates.

Today we start with part 1 of 14!

Must I write a business plan?

A business plan is a structured overview of your business model. It covers all of the aforementioned points, from the founder and your skills to the product, the business idea itself, marketing, staff and, of course, financing.

Business plan – what is it?

All parts of the business plan are neatly structured, like a little book. In this book the reader learns everything important about the business idea and business model.

For yourself, you don’t necessarily need a business plan. A business plan is usually for third parties, from sales staff who are familiar with the matter to banks where you need credit for your growth, from investors who want to invest in your project to advertising agencies who need to quickly understand your business model, for designs, videos or websites. Depending on the adressee, you can change certain data or remove individual parts of the business plan completely.

That doesn’t mean the business plan won’t help you. After all, you’ll learn to sharpen your business idea and it’s a bit like with the cheat sheet back in school. You have to memorize an entire book that has the content of an entire year. Contexts, calculations, names. The summary helps you on the one hand that you have a red thread as far as the topics are concerned, but on the other hand you also remember the individual information by summarizing it compressed.

Understanding of the business model for third parties

However, a business plan helps above all third parties who should understand your business model. Here it is the same as in school, depending on the subject the contents differ. If you haven’t had physics yet, you have to explain the basics, the big context. Someone who doesn’t know anything about your business, e.g. a bank clerk from Lebensmittel E-Commere, should understand within a very short time what you are doing and how profitable your business model can be. It’s impossible to read an entire book. A business plan in a clean presentation, quickly made. Accordingly, the business plan is your little cheat sheet, for him and for others.

Short form or in detail? Elaboration

Your business plan includes everything important on the subject, in short form. After the business plan comes the short presentation. At the end of the day, your entire business model is just a slide with three key points. Your entire funding, two slides, two graphics, and a few dates.

The business plan already looks like this in its shortest form (short presentation). Anyone who pursues more complex business models, e.g. financial transactions through an app, must of course go a little further. Here the business plan is no longer just a presentation, but a paper. Here you explain the basics on up to 10, 20 pages. You give the answers to the question, how your business model works and how it is established economically, successfuly in the market.

In short, your business plan is a detailed collection of ideas, followed by validation (audit and evidence) for banks and investors. As described above, the scope of a business plan varies extremely depending on whether it is used internally, e.g. for your own team, your advertising agency or externally for bankers and investors.

Scope and type of business plan

• General applies to the business plan, no matter in which size: improvement of the own idea and orientation for third parties
• Sketch / mind map
• Short presentation with a maximum of 10 slides; 3 key points each
• Business plan in text form on 10 pages + analyses
• In addition (optional) the financial plan for 3 to 5 years: includes all planned expenses and income, including profit calculations

To get the loan from the bank or the desired amount from your investor, you definitely need a business plan. He helps you improve your own idea. It helps to orient third parties, such as banks and investors. While you are editing page 8, you notice that one point is missing in the risk assessment on page 12. As you adjust the risk assessment, you notice that I’m making a completely new option in distribution. Immediately you adapt this place on page 14 and so on. Constant optimization, also concerning your business plan itself.

When your business plan is ready, you are well prepared not only for your business, but also for all forms of questions that will come your way.

Business plan in practice

With your business plan, you will now have a functioning business model in place. Your proof of concept. In the next steps it is important to summarize all your considerations in short and concise sentences. So that your business model is easy for third parties to understand. The entire business plan will be a brief overview of you, your ideas, the USPs, an insight into potential customers, team, capital needs, risk analysis and sales volume. So far we have had many theoretical thoughts, now it is time to put everything into words.

Business Concept (short): Structure

This is how you describe your business idea in the shortest possible time:

1. Name of the future company? → unimportant
2. Name(s) of the founder(s)?
3. What experience / knowledge qualifies you for this start-up project?
4. What’s your business idea?
5. What is special about it?
6. Which potential customers are eligible for your offer?
7. How should your offer reach customers (keyword: marketing)?
8. What total capital requirements do you need for your project?
9. What sales volume do you expect in the next few years
10. How many employees want to employ after three years?
11. What goals have you set for yourself?
12. What risks is your project exposed to?
13. When do you want to start your project?

Guideline: Setting up your own business & business plan

You want to start your own business as a real estate agent or with another business idea? We support you with tips on your business plan and concept. Whether self-employed full-time or part-time self-employed: If you want to set up your own company, you have to think about a lot, in advance and in the operative business. From the right idea to health insurance – what needs to be considered if you want to become self-employed?

There is no training or further education for entrepreneurs. Managing director is you or not. Your own ambition is always important, because this is the only way to improve, every day.

The topics at a glance:

Der Beitrag Business plan: Structuring, Definition and Best Practice – Becoming Independent Part 1 erschien zuerst auf ℄ Real Estates.

Section (land register) at a glance: The outline of the most important data

• Composition of three departments
• Division I: Personal data of a person
• Section II: Encumbrances on the property (without liens on the property), registration of existing residential rights, ensuring that there is only one buyer
• Section III: Notation of liens on real property

Back to the wiki: Real Estate

Der Beitrag Division (land register) as outline erschien zuerst auf ℄ Real Estates.