Receiving large sums in Germany from abroad: do you owe tax to the Finanzamt?

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Sending or receiving money internationally can raise a lot of questions, especially for expats living in Germany. One of the most common concerns is whether money transferred to Germany is taxed, and if so, how to stay compliant with German tax laws.

Whether you’re receiving financial help from family, transferring savings, or getting paid for freelance work, this guide will help you understand what you need to declare, and when.

Let me know if you have any questions, in the comments section. I answer each question personally.

Are money transfers to Germany taxable?

Not all money transfers are taxable in Germany. The key factor is why you’re receiving the money:

  • Not taxable: Personal savings, gifts within allowance limits, family support.
  • Taxable: Income from work or services, large gifts above the tax-free threshold, inheritances.

In short: money itself isn’t taxed, but the reason behind the transfer might be.

When do you have to report a money transfer?

You may need to report a transfer if:

  • The amount exceeds €10,000, triggering anti-money laundering (AML) checks.
  • The money is a gift or inheritance over the tax-free allowance.
  • The money is earned income, even from abroad.

German banks are legally required to report suspicious or large incoming transfers, especially if they exceed the €10,000 threshold.

Gift tax rules in Germany

Germany has a gift tax (Schenkungsteuer) that applies to both domestic and international transfers, but only when gifts exceed the legal tax-free allowances.

These thresholds depend on your relationship to the sender and are reset every 10 years. Here is an overview of those thresholds:

 Tax-free amount (every 10 years)Tax bracket
Spouses and registered partners500,000 eurosI
Children and stepchildren400,000 eurosI
Grandchildren whose parents have already died400,000 eurosI
Grandchildren whose parents are still alive200,000 eurosI
Great-grandson100,000 eurosI
Parents and grandparents20,000 eurosII
Siblings and their children20,000 eurosII
Stepparents, children-in-law and parents-in-law20,000 eurosII
Divorced spouses and separated civil partners20,000 eurosII
all other recipients20,000 eurosIII
Source: Sections 15, 16 ErbStG

Please note that the tax bracket in this table is NOT the same as the tax class related to income tax.

Tax rates for amount above the threshold

If the gift exceeds the allowance, the excess is taxed at progressive rates depending on value and relationship (from 7% to 50%).

Example: If your parents send you €450,000, only €50,000 is taxable (the first €400,000 is exempt).

Inheritance tax for money sent from abroad

Germany also applies inheritance tax (Erbschaftsteuer) to residents receiving money or assets, even from abroad. If either the recipient or the deceased was a tax resident in Germany in the last 5 years, the inheritance is usually taxable.

  • The same tax-free allowances and rates used for gift tax apply to inheritances.
  • Inheritances must be reported to the local tax office (Finanzamt) within 3 months.
  • Once instructed by the Finanzamt, you will need to fill-in a special form to report the amounts and the recipient. Each Bundesland has their own forms for that (e.g here for Berlin).

Business and freelance income from abroad

If you’re a remote worker, digital nomad, or freelancer living in Germany, any income you earn from foreign clients is taxable, as part of your standard German income tax.

You must include this income in your annual tax return (Einkommensteuererklärung) & charge and remit VAT (Mehrwertsteuer) if applicable

Germany has double taxation treaties with many countries (including the US, UK, and Canada), which prevent being taxed twice on the same income. However, you still need to declare the income in Germany.

How to report foreign transfers & tips to stay compliant (if required)

If you’re receiving large gifts, income, or inheritances:

  • Declare gifts or inheritances using the appropriate tax forms (e.g. Schenkungsteuererklärung).
  • For business income, include earnings in your annual tax return.
  • Banks may automatically report high-value transfers to the tax office.
  • For large gifts or inheritances, it’s helpful to create a written gift letter or contract to show the intent and prevent confusion.
  • Keep all documentation: bank receipts, contracts, invoices, or letters stating the purpose of the transfer.
  • Use the sender’s full name and specify the reason in transfer notes.
  • Split large gifts across multiple years if possible.
  • When in doubt, consult a Steuerberater (tax advisor), especially for amounts near or over the threshold.

For most expats, receiving money in Germany from family or personal savings won’t trigger tax issues. But understanding when taxes do apply, and how to report them properly, can save you stress and fines. The more you can document and clarify the purpose of each transfer, the smoother your experience will be.

Sources & references

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