U.S. EXPAT TAX GUIDE – GERMANY
Why are German banks asking about my US citizenship?
If you’re a US citizen or green card holder living in Germany, you might be asked by your bank to confirm your US citizenship status and provide your Social Security Number (SSN).
This is due to the Foreign Account Tax Compliance Act (FATCA), which requires foreign banks to report the details of accounts held by US persons to the US government. The goal of FATCA is to prevent tax evasion by Americans using foreign accounts.
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What is the purpose of the W-9 form requested by banks?
Banks require US citizens and green card holders to complete the W-9 form, which is the Request for Taxpayer Identification Number and Certification.
This form collects your SSN and confirms your tax status to the bank, enabling them to meet their obligations under FATCA. Essentially, the W-9 form helps banks comply with international tax reporting requirements by verifying the identity and US tax status of their clients.
What if I am not a US citizen or Green Card holder?
If you are not a US citizen or green card holder, you should complete Form W-8BEN or a similar form provided by your bank. This form is used to declare your non-US status to the bank, differentiating you from US taxpayers under the regulations of FATCA.
Does the bank’s reporting fulfill my FBAR requirements?
No, the reporting done by banks under FATCA does not replace your personal obligation to file a Foreign Bank and Financial Accounts Report (FBAR) if applicable.
While banks report to the IRS for their compliance, you must still file an FBAR if the total value of your foreign financial accounts exceeds US$10,000 at any point during the calendar year. It’s important to remember that banks do not handle FBAR filing for their customers.
How should US citizens respond to these banking requests?
US citizens should fulfill their bank’s requests by accurately completing and submitting the W-9 form. Additionally, it’s advisable to consult with a tax professional to review your own filing obligations, such as FBAR and Form 8938 (Statement of Specified Foreign Financial Assets), to ensure you are fully compliant with US tax laws.
What should I do if I haven’t filed US tax returns for many years, or at all?
If you have not filed US tax returns or FBARs for several years, you may be eligible for the IRS Streamlined Tax Amnesty program. This program allows US taxpayers living abroad to catch up on their tax filings without facing penalties, assuming their failure to file was non-willful.
You can learn more about the IRS Streamlined Tax Amnesty program here.
Why partner with a specialist Expat accountant?
Living outside of the US can make your tax filing requirements complicated. To ensure you pay the minimum amount of taxes, it’s critical to work with an accountant who understands every aspect and avenue for reducing your tax liability. We have a dedicated team of tax accountants who work exclusively with US expats earning and investing in Germany. Partnering with a specialist expat accountant can help you navigate complex tax regulations and optimize your tax situation.
