Does depreciation also apply to foreign properties?
Does depreciation also apply to foreign properties? If I receive rental income from Dubai while residing in Germany and I don't have to pay taxes in Dubai, can I deduct 2% or 3% of my new construction in Germany? And how is this documented?
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Real estate abroad leads to foreign income when rented out (Section 34d Sentence 1 No. 7 EStG).
The calculation in the income tax return is carried out according to German principles (meaning that the corresponding depreciation regulations in the Income Tax Act are also applied).
What exactly should be proven?
There isn't one. Just as, as far as I know, there's no income tax or other comparable tax there (VAT and corporate tax are two different things).
This also means that no foreign tax (§34c EStG) can be credited against German income tax.
The only point you have to pay attention to when it comes to real estate in a third country: Section 2a EStG in the case of losses.
Section 2a, Paragraph 1, Sentence 1, No. 6a of the Income Tax Act (EStG) states that losses in this regard may not be taken into account in the German tax assessment as loss deductions. They may only be offset against positive income of the same type (rental and leasing) and from the same country (United Arab Emirates).
What exactly should be proven?
Yes, for example, that you want to depreciate 3% instead of 2% because it is a new building.
And the breakdown of the land and the building value must also be carried out
As with German real estate, there are corresponding documents: purchase contract, year of construction, etc., which the tax office requires.
The only thing that is added is that you have to have the documents translated.
This is called purchase price allocation (used to determine depreciation).