In Florida, you benefit from a tax system that is significantly simpler and more favorable than the German system. From low tax rates to generous deductions: Another argument for your investment in Cape Coral.

In Germany, high taxes are the foundation of the social market economy. The US tax system is much more performance-oriented. This is reflected in lower tax rates and a simpler structure.

While the German system is complex due to numerous special regulations, exceptions and loopholes, the American system impresses with its transparency and clarity. For you, this means less time spent on tax issues, lower costs for tax advisors and simpler financial planning.

Unlike in Germany, there are no allowances for income tax in the USA - taxes are payable from the first dollar, albeit at very moderate rates.

Frank Rahlf, CEO of DARIA, puts it in a nutshell: "In the USA, paying taxes is a pragmatic contribution to the community, but nobody wants to pay more than they have to."

Tax rates in the USA

The tax rates in the USA are staggered and remarkably low compared to Germany. The following applies to married couples (relevant for many DARIA investors):

• Up to 20,000 dollars annual income: 10 percent tax
• From 20,000 to 80,000 dollars: 12 percent on this income share
• From 80,000 dollars to the next level: 20 percent

An example: If you earn 50,000 dollars, you pay:

• On the first 20,000 dollars: 2,000 dollars (10 percent)
• On the remaining 30,000 dollars: 3,600 dollars (12 percent)
• Total: 5,600 dollars with an average rate of only 11.2 percent

In Germany, you would quickly slide into tax brackets of 30% and more for the same income. While the German top tax rate of 45% already applies to moderate incomes, the highest tax bracket in the USA is 37% - and this only applies to married couples with an income of around 600,000 dollars or more.

Simpler, clearer, more relaxed

The American tax system is therefore much clearer than its German counterpart. Instead of endless special regulations and loopholes, there are clear lines: There is no tax-free basic amount in the USA. This means that tax is payable from the first dollar earned. 

That means for you:

• Less effort for tax returns
• Manageable costs for tax consultants
• A reliable basis for calculating your investment

Tax advisors in the USA are service providers, not secret keepers - a pleasantly down-to-earth experience.

Travel and save? Welcome to Florida!

As an investor, you can deduct your trips to Florida from your taxes. If you travel to inspect properties or for networking, your flight, accommodation, rental car and even meals become business expenses.

One example:

• Flight tickets
• Rental car
• Hotel
• Food

An example calculation: With annual income of 12,000 dollars, you would pay 1,200 dollars in tax (10 percent). With deductible business travel expenses of 2,200 dollars, your taxable income drops to 9,800 dollars and your tax burden is only 980 dollars.

Frank Rahlf puts it humorously in a nutshell: "Others save their whole lives for a vacation in Florida - you can write it off against tax."

Of course, the costs must be proportionate to your income and justified by your business. However, as your income increases, so do your deduction options.

Double taxation? Don't panic

A common concern: "Do I have to pay tax on my winnings twice?" 

The reassuring answer: No! The double taxation agreement (DTA) between Germany and the USA prevents this.

This is how it works:

1. You pay taxes where the income is generated - in the USA
2. In Germany, your US income is only taken into account for the progression proviso
3. The resulting higher tax rate will only be applied to your German income
4. Taxes paid in the USA are credited

An example: With a German income of 50,000 euros (tax rate 20 percent) and US income of 7,000 euros, your tax rate may rise to 21 percent. The difference of 500 euros (1 percent of 50,000 euros) is offset against the taxes already paid in the USA.

The impact is usually minimal - for normal earners, it is often only 1-2 percent more on their German income. Top earners, who already pay the top tax rate in Germany, have no additional tax burden at all.

The different phases of your investment

The DARIA concept is designed for long-term growth. You go through various phases, each of which has its own tax characteristics:

Start-up phase (12,000 dollars annual revenue):

• In this first phase after you join, you will receive around 1,000 dollars a month
• 10 percent tax on gross income
• Deducting an annual business trip reduces your taxable income
• Effective tax burden: approx. 7.9%

Growth phase (36,000 dollars annual revenue):

• After a few years, your investment will reach around 3,000 dollars a month
• Scaling: 10 percent on 20,000 dollars, 12 percent on the rest
• Thanks to more extensive deductions, the effective tax rate remains below 9 percent
• In Germany, the progression proviso is increasing, but remains manageable

Maturity phase (120,000 dollars annual revenue):

• This is the long-term goal of many DARIA investors for financial independence
• Average tax burden approx. 15-16 percent before deductions
• Often below 14 percent after deductions

This is a big difference to Germany, where a similar income would quickly have to pay 40 percent.

The silent turbo: reinvesting instead of selling

An often underestimated advantage of the low tax burden: you can reinvest much more of your profit.

If you pay 20 percent less tax, your capital can grow more than twice as fast over 20 years. This is an enormous lever, especially for long-term goals such as financial freedom.

The American tax system offers you as an investor a whole range of decisive advantages. It starts with the significantly lower tax rates, which enable you to realize real profits even with low income. Then there is the clear and transparent structure of the tax rules, which gives you planning security and a more relaxed approach to tax issues. The numerous deduction options - for example for travel, accommodation or other business expenses - significantly reduce your tax burden and make it easy for you to structure your investment cleverly. 

Last but not least, the double taxation agreement between Germany and the USA ensures that you don't have to worry about a double tax burden. Instead, you enjoy the benefits of fair treatment of your income in both systems.

In short: your investment in Florida benefits twice over - from the sun and from a tax logic that offers you maximum freedom of organization with minimum frustration. With the right knowledge, a healthy dose of pragmatism and a good network, you can concentrate fully on what really matters: building your transatlantic wealth. And with a smile on your face because you know you are using your capital wisely. Or, as Frank Rahlf so aptly puts it: "Here, success is desired, not suspected. Use it to your advantage!"