How to avoid double taxation in Germany

Let’s be honest, taxes are never a fun topic. Even the word “taxes” can cause panic! They’re even less fun if you’re getting hit with the extra paperwork that comes with international finances. Now that it’s easier to live and work across the globe, there are more situations where income is earned in different countries, such as:

  • social security, unemployment or retirement payments
  • salary or work compensation from cross-border employment – especially when you’ve recently moved between countries or live in a different country from where you work (commuters, self-employed persons)
  • profits from running an international company – if it has a permanent office or shop abroad
  • alimony, inheritance or gifts
  • dividends from shareholding or interest on investments
  • rental payments or profits from selling property

If you live in Germany, you are legally obligated to report and pay taxes on your worldwide income. Things can get pretty complicated if you’re an expat in Germany, trying to figure out how to file taxes.

double taxation Germany

The thing is, you’re probably already paying taxes on the income in the country where it originated. I bet you want to avoid double taxation in Germany on the money you’ve rightfully earned! Luckily there are international rules that govern the way most cross-border income and taxes should be handled.

Don’t know what rules to avoid double taxation Germany has? I’ll explain the basics about how you can benefit from tax relief schemes through the double taxation agreements that Germany has negotiated with many countries.

What are double taxation agreements?

When it comes to double taxation Germany has negotiated some agreements to make things easier for most people. These are called bilateral tax treaties or Doppelbesteuerungsabkommen and are a negotiated deal between two countries that states the rules for how income earned in one country is treated by the tax code in the country of residence. There are three ways that foreign income is usually treated:

  1. Full exemption of foreign income (Freistellungsmethode),
  2. Exemption of foreign income with progression (Freistellungsmethode mit Progressionsvorbehalt)
  3. Foreign income tax credit (Anrechnungsmethode).

Exemption of foreign income with progression

Germany generally applies the method of exemption with progression. What does that mean? Well, while Germany won’t tax you on your foreign-earned income, the amount of your global income will affect under which tax bracket your German-earned income is taxed.

Example: You live and work in Germany, earning €60,000 annual income, while also earning €12,000 from a business you run on the side in India and €500 from an investment there. Germany will use your total worldwide income of €72,500 to calculate your annual tax bracket and then use that to tax the €60,000 you earned in Germany. The money from India will be taxed there, offset by the taxes you have paid in Germany, thanks to the double taxation treaty.

Foreign income tax credit

If your country doesn’t have a double taxation agreement with Germany or your country’s agreement states otherwise, you might be able to instead credit the foreign income tax you’ve paid against your German income tax – but then only up to the amount that the German tax code would tax that income.

Example: So, if you worked for a few months in Chile and paid tax on your income, then you might be able to credit those tax payments against your German income. If you’d usually pay €2,000 on that income in Germany, but you paid €2,200 in Chile, then you can only apply up to German €2,000 in credit.

While most countries only tax their residents and individuals who earned income in that country, there are some exceptions. One is for citizens of the US – regardless of your country of residence and source of your income, you are required to file an annual tax return and potentially pay taxes on your income. You don’t have to have ever lived in the US or earned money there to fall under these requirements. That said, if you’re earning less than $102,000 you’ll benefit from the foreign earned income exclusion. For lower annual income, check the double taxation treaty between the US and Germany.

Countries that have a double taxation treaty with Germany:

AlbaniaIranPhilippines
AlgeriaIrelandPoland
ArgentinaIsraelPortugal
ArmeniaItalyRomania
AustraliaJamaicaRussia
AustriaJapanSerbia
AzerbaijanJerseySingapore
BangladeshKazakhstanSlovak Republic
BelarusKenyaSlovenia
BelgiumKoreaSouth Africa
BoliviaKosovoSpain
Bosnia and HerzegovinaKuwaitSri Lanka
BulgariaKyrgyzstanSweden
CanadaLatviaSwitzerland
ChinaLiberiaSyria
Ivory CoastLiechtensteinTaiwan
CroatiaLithuaniaTajikistan
CyprusLuxembourgThailand
Czech RepublicMacedoniaTrinidad and Tobago
DenmarkMalaysiaTunisia
EcuadorMaltaTurkey
EgyptMauritiusTurkmenistan
EstoniaMexicoUkraine
FinlandMoldovaUnited Arab Emirates
FranceMongoliaUnited Kingdom
GeorgiaMontenegroUnited States
GhanaMoroccoUruguay
GreeceNamibiaUzbekistan
HungaryNetherlandsVenezuela
IcelandNew ZealandVietnam
IndiaNorwayZambia
IndonesiaPakistanZimbabwe

Treaty map — Blue are future agreements, the rest are from before January 2016.

Taxes are like Bonzai; a tedious and meticulous art. 🙂

So now what?

Does your country not currently have rules around double taxation Germany? It might be best to speak to a tax consultant about your specific case and how they can help you avoid paying taxes twice on your income.

But if you’re from one of the covered countries and have all the necessary financial documentation, your taxes don’t have to be difficult. Fill out the usual German tax return forms and declare your worldwide income for the time frame you were living in Germany, as well as the form for income that was earned and taxed abroad (Anlage AUS – Ausländische Einkünfte).

Sources; 1, 2, 3, 4, 5

94 Comments

  • Reply Lee 09/10/2020 at 16:46

    Hello Bastien,
    Thanks a lot for the valuable information!

    I finished my MA in Berlin last year and begun to work as a freelancer since September in 2019.

    I registered to Finanzamt this year and got a letter from Finanzamt to report income tax for 2019.

    My question is that should I report all my incomes including support money from my parents before I begun to work or do I need to report only the income since my first invoice from September, 2019?

    Many thanks in advance,
    Best
    Lee

    • Reply Bastien - Settle in Berlin 13/10/2020 at 10:27

      Reading this source, it states that you should put this in the “Sonstige Einnahmen” line.

  • Reply Ousoubi Sanuwo 30/09/2020 at 17:06

    I work in Germany for five years but I want move other countri I’m not coming back here again it is possible to demand my tax return back to me

    • Reply Bastien - Settle in Berlin 01/10/2020 at 09:43

      Hey Ousoubi. Yes it is.

  • Reply Peter 19/09/2020 at 23:19

    So I worked in Uk till March last year and started work in Germany in September. I understand that I have to present all of that to authorities. My question is about tax year in Germany and tax year in UK. In Uk tax year is April till March and not calendar year. Do I calculate that myself in proportion? and what exchange rate do I use to state an amount in Euro ? On top of that I lost some UK documents due to fire and it will take some time to get it all back now. It will make it harder for me to know exact amounts of my taxes payed. Can I overestimate or that would create more problems. I hope you know.

    regards

    Peter

    • Reply Bastien - Settle in Berlin 21/09/2020 at 09:41

      Hey Peter. I can’t give you any pointers i’m afraid. Your guess is probably better than mine. Sorry.

  • Reply Hema Kumar 03/09/2020 at 09:50

    Hey there,
    Thank you for your very informative article. So, I suppose that means if I am resident in Germany, but I open a business in Australia which begins to earn money, I need to declare those earnings in Germany at the end of the financial year? I don’t get charged tax on those earnings, but my tax bracket includes those earnings and so therefore I most likely pay a higher rate of tax in Germany. How do I then offest this with tax payments in Australia? Any clue as to how I can manage that or who I would speak to with regards to that piece of the puzzle?
    Thanks again for your help!
    Hema

  • Reply Ahmed 24/08/2020 at 14:47

    Hi,
    I was working as freelancer in my home country from January 2020 to August 2020 and I moved to Germany in August. I didn’t pay any taxes on my income in Tunisia, do I need to pay the tax on these incomes in the end of year in Germany? I was not a resident in Germany before August 2020.

    • Reply Bastien - Settle in Berlin 25/08/2020 at 10:55

      Hey Ahmed. I am not aware of specific agreements between Tunisia and Germany, you ‘d need to check that to get an answer.

  • Reply Gary McCourt 30/07/2020 at 15:37

    I have no German income, all my income is from a foreign country that has a tax agreement with Germany. Under the Exemption of foreign income with progression, would Germany be able to collect any taxes because I only have worldwide income but no German income?

    • Reply Bastien - Settle in Berlin 01/08/2020 at 22:04

      Hey Gary. You know best the details of the bilateral agreement between the two countries, i suppose you can make you own conclusions about what it means for you. Can’t really guess that for you i’m afrai.d

    • Reply Naz 25/09/2020 at 00:00

      Hi Gary,

      Did u manage to find an answer ?
      I’m in a similar situation where my overseas based company sent me to Germany to work for my clients.
      All my salary is received through my overseas bank account.
      If u got an answer pls email me @[email protected]

  • Reply eric 23/07/2020 at 20:15

    Hi. Got a question about tax refunds. I got an employee share option plan which i got from my previous employment in Germany. I now live in Singapore. Upon my excersing the share option, the company will withhold half of the gross amount as tax, would you know what is the best way to claim a refund from this? Thanks

    • Reply Bastien - Settle in Berlin 24/07/2020 at 21:27

      Hey Eric. Sorry i can’t tell. this is too advanced for me. You’d need to ask an expert.

  • Reply Aakanksha 19/07/2020 at 16:39

    Hello there,

    Thank you for the helpful article.

    I have a question. I moved to Germany in December 2018. Currently filing tax return for 2019 (German resident for 2019). I recieved Bonus income from my employer in India in 2019, for work done in 2018, before I moved to Germany. Where should this income be declared?

    • Reply Bastien - Settle in Berlin 24/07/2020 at 20:49

      Hey Aakanksha. If i followed you correctly, as a German resident in 2019, you should declare any and all income you got that year, regardless of when you work was performed for that money.

  • Reply Faisal 16/07/2020 at 01:12

    Hi,

    Thank you for the valuable information.
    I am living in germany since more than 10 years. I wanted to invite my parents for a visit from Pakistan.
    I sent some money from my salary German bank account (around 12000€) in my joint (with my father) bank account in Pakistan for visa purposes to show the bank statement required for Visa. Now I want to transfer this amount (12000) back to my German account. Will this be also considered as an income and will it be taxable ? Do I need to declare it in the tax return as additional income ?

    Thank you.

    • Reply Bastien - Settle in Berlin 16/07/2020 at 10:13

      Hey Faisal. I don’t know. You’d need to ask a Steuerberater.

  • Reply Benny 25/06/2020 at 12:41

    I am a bit confused about living in Germany and selling online products in USA which implies that sales tax is also payed in USA.
    Will this passive income (no matter how little it is) still need to be declared and taxed again in Germany?

    • Reply Bastien - Settle in Berlin 26/06/2020 at 10:14

      Hey Benny. As a German resident, you need to declare any and all income, regardless of its origin yes. Now, how income tax will be handled is something else. Is there an agreement between the US and Germany?

  • Reply Mackle 15/06/2020 at 07:40

    Hi,

    Thank you for the detailed information. I have been living and working in Germany for almost three years on a British passport under FOM, and currently will retain the right to continue living and working under the withdrawal agreement.

    However, I have been offered the opportunity to work in Dubai, and this will mean taking a salary in Dirhams.

    If I were to keep my German address, continue to pay my TK health insurance, and visit my German residence every 2/3 months, what would the tax situation be on my UAE income? And would the 183 day rule apply to me, or does my 3 years living here exclude me from that?

    • Reply Bastien - Settle in Berlin 16/06/2020 at 09:32

      Hey Mackle. This post provides general guidance and cannot comment on so specific situations. You should ask a Steuerberater that question.

  • Reply Deepak Amanna 01/06/2020 at 16:03

    Hi
    I`m an Indian citizen living and working in Germany. According to my understanding and also your article, I’m subjected to Exemption of foreign income with progression. I want to account for the ‘interest earned on my savings in Indian bank ‘ while filing tax returns in Germany but I’m not sure where can I should show this? I am confused about Anlage AUS and Anlage KAP. Could you please

    • Reply Bastien - Settle in Berlin 03/06/2020 at 09:53

      Hey Deepak. Better ask a Steuerberater about that. I don’t want to give you bad advice.

  • Reply AT 01/06/2020 at 07:16

    Hi,

    1. If I have rental income generated in Hong Kong, will the rental income be fully taxable also In Germany? How will the income be treated? (since Hong Kong do not have income tax treaty with Germany)

    2. If I enter and leave Germany using HKSAR Passport after working for 3 years, will I be eligible to obtain the tax and pension refund? (since I am also a holder of British National Overseas passport)

    Thanks a lot.

    • Reply AT 01/06/2020 at 07:18

      I am a Hong Kong citizen by the way

    • Reply Bastien - Settle in Berlin 01/06/2020 at 10:35

      Hey there. 1. I assume you are a German resident. I believe that yes, this income will be taxable in Germany too, but you’d need to ask a professional for confirmation. 2. See this post here.

  • Reply Amanda 17/04/2020 at 07:23

    Hi,
    I arrived and started work in Germany from Australia on July 2017. When declaring my income for the End 2017 German Tax Return do I need to supply details of my Aussie income from Jan – June 2017 EVEN when I paid taxes and declared my Tax return in Australia prior to arriving? (Australian financial year is from July-June).

    In addition, I part own property and started earning income on that from mid 2018. Having read your article, I presume I will need to provide details on what I earned on that property in my 2018 Year End Tax return? Does that amount then apply a full tax exemption or progressive tax exemption based on what you know of the DTA between AU and DE?

    Many thanks in advance for your advice.

    • Reply Bastien - Settle in Berlin 23/04/2020 at 21:02

      Hey Amanda. That would be the gist of it yes from what i understand, but if you have any doubt on how to optimize you situation, you may need to talk to a pro here.

    • Reply Felice 03/05/2020 at 01:52

      Hi, I’m currently a permanent resident in Germany, and I work from home as an independent contractor for an American based firm. I’ve already filed my taxes to the US, but have not done anything in Germany. Therefore, I’m not sure where to go about resolving this.

  • Reply Luis 13/04/2020 at 19:29

    Hi, I am a US citizen and permanent resident in Germany due to my partner who is European. I make 1800€ before taxes. Do I need to file taxes in the US as well? I’ve lived in Berlin for 8 years and I haven’t done it but I signed a document that allows my german bank to send my info to the IRS.
    Thanks

    • Reply Bastien - Settle in Berlin 16/04/2020 at 13:52

      Hey Luis. I won’t comment on the US situation as it’s a pretty unique case around the world. Better ask a fellow American or two about that. I believe it is compulsory to also do it in the US somehow, but can’t be sure.

    • Reply John 13/05/2020 at 21:05

      Luis, you may renounce your US citizenship and apply for german citizenship since you are qualified for residing in germany for 8 years.

  • Reply Devi Singh 04/04/2020 at 16:16

    Hi,
    I am Devi Singh from India. I work for a MNC company in India.
    We have a vendor from Germany for database subscription . We used to deduct withholding tax as per Indian Tax regulation and DTAA between India & Germany. We also issued a transaction based report provided by Indian govt as a proff of Tax paid in India. Now our vendor is saying that t since they are non profit organization , they are not able to get tax credit or refund in Germany. can you please help them in getting refund of taxes paid in India. Your fee invoice will be duly honored by them.

    • Reply Bastien - Settle in Berlin 07/04/2020 at 20:18

      Hey Devi. I don’t provide that kind of service sorry.

  • Reply Prakash 16/02/2020 at 14:40

    Hi
    I am permanent resident in Germany, and i am investing Indian Mutual fund and Equity, the investment amount i made is from my Savings i made here in germany. Now on the gains i earn in INDIA i am paying tax already in INDIA, when i bring back this money, do i have to Pay tax again here in Germany ?

    • Reply Bastien - Settle in Berlin 16/02/2020 at 20:46

      Hey Prakash. This post just gives general guidance about the topic. Get in touch with a specialist for a consultation.

      • Reply Prakash 18/02/2020 at 06:11

        Thanks for the information. This info is extremely important at the moment.

  • Reply Elk 09/02/2020 at 14:41

    Hi there!

    Thank you so much, this is a great resource. I’m wondering- if I’ve lived here for less than 5 months, and earning my entire income abroad, am I still required to pay taxes for 2019? In 2019, I’ve lived in Germany for less than 4 months, from mid Sep- end of Dec.

    And another thing I’m wondering about- I’m getting paid entirely in the U.S and pay all my taxes there. I make no income in Germany, so under “Exemption of foreign income with progression”, would I be required to pay any taxes at all?

    Thank you!

    • Reply Bastien - Settle in Berlin 12/02/2020 at 09:29

      Hey Elk. I’d like to help but the US tax rules are so specific and unique that i don’t dare share an opinion on this.

  • Reply Murali Jagannathan 03/02/2020 at 01:20

    Hi, I am a resident in Germany. What would happen to capital gains arising from sale of shares in India. From the DTAA (Article 13, class 4) it seems to be suggest that it is taxed in India. This is correct? Or Does it attract 25% + surcharge in Germany?

    • Reply Bastien - Settle in Berlin 03/02/2020 at 21:33

      Hey Murali. This is just too damn detailed for me. I just give a general advice on the post.

  • Reply Ramya 13/01/2020 at 15:57

    Hi, I have a German Permanent Residence and will be working in Germany till the end of January 2020. From February I will be working from India for the next two years (till February 2022) and I will not be having any income from Germany. I will continue my Job in Germany from 2022. I will be paying tax in India for the income earned in India during this period. I will be also keeping my German PR active during this period (I will not abmeldung). Do I have to pay any tax in Germany for the income earned in India?

    • Reply Bastien - Settle in Berlin 14/01/2020 at 09:30

      Hey Ramya. that’s a great question. I’d approach a Steuerberater if i were you. I’m not sure it’s possible to retain German residency when effectively leaving the country for so long.

  • Reply Joanna 13/01/2020 at 12:10

    Hello!

    I left the UK at the end of last year, I’m self-employed there, I wanted to keep going in future with projects for the UK but I live now in Berlin. Here I have a small contract for just 450 euro. My accountant said that I will need to pay double tax if I will keep going with self-employed in UK but I found put that the UK has an agreement with Germany. I’m confused a little bit if would be good just to close self-employment in the UK and start a business here, to close the topic and just not be worrying about dealing in between 2 countries. In the same time, I heard that is good to keep going with the history of self-employment in the UK just for the year to count for retirement time.
    I will appriaciate any advice from your perspective. Thank you!

    • Reply Bastien - Settle in Berlin 14/01/2020 at 09:34

      Hey Joanna. I can’t possibly compete with the advice of a professional so i would first and foremost listen to your Steuerberater. My 2 cents: if you are settled here long-term, it makes more sense to become self-employed here (guide this way btw) indeed. As for retirement time, i don’t know that the british rules there, so i can’t say.

  • Reply Charles 07/01/2020 at 18:58

    This is really incredible information and it’s strange that after searching for months, that you’re the only one to just say it clearly. 🙂

    My question is, I’m a part owner of a Canadian based corporation with other directors that gets paid by clients – mainly in the United States of America… however I live in Germany (with German health insurance etc.)

    Since the corporation pays corporate income tax, and corporation is separate from an actual person, what do I do exactly?

    What I’ve been doing is invoicing the corporation as a German Freelancer (I have a steuernummer and all that), and then paying the tax on what the corporation pays me.

    Does that sound right?

    Do i have to declare the corporation’s total earnings as my income, even though there are other directors?

    What do you suggest I do here?

    Thanks.

    • Reply Bastien - Settle in Berlin 08/01/2020 at 17:11

      Hey Charles. It’d be better to take this to a Steuerberater with expertises in that field. My humble opinion is that it sounds wrong to proceed that way. Why not simply getting paid your interest/payout that the corporation owes you as an owner (not as a freelancer) and then add this income as part of your Steuererklärung at the end of the year? Why going through your freelancing?

    • Reply Brandon 29/02/2020 at 08:57

      Hi, I am an Australian living in Germany. I am earning an income in Australia and plan to work in Germany also. I understand Germany will tax me on global income levels on my salary earned in Germany – Do you know if Australia will do the same?

      • Reply Ricky 13/08/2020 at 17:29

        Hey Brandon

        In a similar situation… Wondering if you found an answer?

        Ricky

  • Reply Thierry 19/12/2019 at 16:44

    Great site and great resource for people to settle in Berlin. However, I’m working in Berlin and staying in Berlin, but not ‘living’ in Berlin. My wife and kids are still in Belgium and I’m still going back and forth every weekend.

    I got the form needed to make sure I’m in the right steuerklasse (married with wife and kids that should be III), and that got (finally) approved by the Finanzambt for the HR payrol. But I’m still wondering, if I don’t live in Berlin, where do I apply for a Tax ID?

    My case would be a typical cross-border commuter case in the EU sense, and indeed the double taxation treaty works out. But I would need to Tax ID to get claim some money back at least 😉

    • Reply Bastien - Settle in Berlin 30/12/2019 at 15:54

      Hey Thierry, Great questions. I’d talk to a Steuerberater if i were you.

  • Reply Sally 12/12/2019 at 06:43

    Hi, do you have recommendations of accountants that have experience with American/German dual citizens’ taxes?
    Thanks!
    Sally

    • Reply Bastien - Settle in Berlin 17/12/2019 at 00:08

      Hey Sally. Not at this second: maybe you want to check this post though, it has recommendations for Berlin but also for Germany wide.

  • Reply Clare Treacey 14/11/2019 at 12:18

    Hi Bastien, thanks for the excellent blog! I have a couple of questions which I’m hoping you can help with.
    I moved to Germany from the UK in April 2018 and am currently trying to fill in my tax return for 2018. I’ve been employed here since May 2018. Do I need to declare the money that I earned in the UK in January-March 2018 (before I moved to Germany)?
    Some of the money I earned while living in the UK arrived in my bank account after I moved to Germany in April. Do I declare this money?
    Thanks! Clare

    • Reply Bastien - Settle in Berlin 25/11/2019 at 11:49

      Hey Clare. You might be better off asking a Steuerberater but since you can be considered a German resident for the year 2018, you ought to declare all and any income for that year, even if the source is from abroad.

  • Reply Dafni 31/10/2019 at 14:43

    how does it work with gifts/inheritance? If I received a gift in a country with a double taxation treaty with Germany and already paid the inheritance tax in that country, do I still need to do something in Germany?

    • Reply Bastien - Settle in Berlin 23/11/2019 at 09:23

      Hey Dafni. I suggest to get in touch with a Steuerberater for this case. My opinion is that is classified as “extraordinary income” and should be accounted for also on the German side, like any other income.

  • Reply George 27/10/2019 at 11:19

    Thank you very much for the information and this seems like a great site! I actually didn’t know about filing world income in Germany….most sources emphasize how important it is to file US tax returns while residing abroad and not the other instance. Do you happen to know if there’s a specific procedure and/or what happens if you didn’t file the “Anlage AUS” in the past? Many thanks!

    • Reply Bastien - Settle in Berlin 29/10/2019 at 14:53

      Hey George. No i can’t say anything about that sorry.

  • Reply Karle Kincaid 04/10/2019 at 15:48

    Hello, I am an American citizen retired in Germany. I receive a pension from the US military and I have investment income in the states. I have no income from any sources in Germany. I just want to be clear that under the double taxation rules, it sounds like I will have no taxable income to Germany. Am I understanding this correctly?

    • Reply Bastien - Settle in Berlin 07/10/2019 at 23:04

      Hey Karle. Get in touch with an expert for more accurate answers.

  • Reply Claire Geiger 19/09/2019 at 13:33

    Thanks for this very informative site and all your help navigating a move to Germany.
    If I stay on a US contract and get paid 100% by the US, it sounds like I will still file a US tax return but will also be required to pay into German social security and other taxes. Will an accountant be able to then help with some exemptions? Or is there a suggestion on a better way to approach trying to work for a US company from here (while my husband is on a German contract)?

    • Reply Bastien - Settle in Berlin 23/09/2019 at 16:24

      Hey Claire. An accountant will be able to help you further on this specific topic.

  • Reply Benjamin Gervan 10/09/2019 at 10:50

    Hi,
    I have a specific case. I am planning to move to Germany, but I will work for a company from Estonia.
    The Estonian company won’t pay salary tax, because I work from abroad (the company is mine).
    In this situation, I can plan with the taxes of https://europa.eu/youreurope/citizens/work/taxes/income-taxes-abroad/germany/index_en.htm
    am I right? (There is an agreement between Estonia and Germany)
    Do I need to pay taxes every month/quarter or yearly?
    Do I need to pay health insurance above that, or it is included to that yet?
    Thanks.
    (In case of you can’t answer, do you have a contact who can?)
    Thanks again.

    • Reply Bastien - Settle in Berlin 10/09/2019 at 20:58

      Hey Benjamin. If you become German resident, i believe you will be liable for income tax in Germany only, and not in Estonia anymore. You will declare all your income sources, regardless of their origin. I cant really fully reply on so little details but yes, you will need a local health insurance. I suggest you get in touch with a tax advisor.

  • Reply David Hawkins 08/08/2019 at 13:10

    I am totally confused about the double taxation agreement between Germany and UK.
    I currently automatically pay tax in the UK on two pensions, an ISA and some shares.
    You talk about Exemption of foreign income with progression (Freistellungsmethode mit Progressionsvorbehalt)
    Which seems to imply that I don’t have to pay extra tax in Germany but my UK income counts towards my total income in Germany.
    But I assumed that if tax was higher in Germany I would have to pay the extra to the German authorities,
    My question boils down to this, should I keep my shares in the UK or transfer them to Germany ?

    • Reply Bastien - Settle in Berlin 09/08/2019 at 16:37

      Hey David. This is just way beyond my humble knowledge, you should get in touch with a real tax consultant.

    • Reply Chris 20/04/2020 at 11:47

      Hi David Hawkins

      I ask myself the same question. What to do with ISAs and how to declare them as a lot of UK brokers don’t provide the necessary documentation.
      Can you please share your experience and what you found out so far?

  • Reply Lara 06/08/2019 at 15:11

    Hello,, I am lara , and i am working in germnay Munich from last one year and i am holdin work permit but i am not EU citizen, I am planing to continue this job from india but i will come back in germany within five months and i will stay in germany one month to keep my house to be register to my name so in one yeat i will be in germnay for two months and rest 10 months i will be in india .So i need to pay tax in germany and also in india. ??

    • Reply Bastien - Settle in Berlin 09/08/2019 at 16:24

      Hey Lara. You need to check the agreements between India and Germany, if any. In most cases, you’d need to pay income tax where you are resident. It seems that you would be an Indian resident for that time period right`?

  • Reply Duarte 06/07/2019 at 23:41

    Thank you for the useful information.
    Do you, by any means, know which form to use to declare foreign income? I worked in Sweden for several months before coming to Germany last year, but I have no idea where in the forms to declare my earnings… Same thing for some investments that I have. Any idea?

    • Reply Bastien - Settle in Berlin 13/07/2019 at 21:34

      HEy Duarte. As mentioned in the last paragraph: Anlage AUS.

  • Reply chinna 03/07/2019 at 13:07

    Thanks for the great post. Very useful.
    I have a question. I have one NRE account in one of the Indian banks. I opened it 6 years back and i use to send money to that account from Germany (tax paid amount) I will also get some interest on my fixed deposit from that account. Since its an NRE account if i want i can bring that entire amount back to Germany. Indian banks say on income generated from NRE accounts had no TAX. As per your post i should disclose my interest amount in Germany in my tax declaration. I did not know this before and came to know only after reading your post. Shall i disclose all the interest that i earned so for in next tax returns?. How much percentage of that interest will be taken as TAX by German authorities?. Do you think i should show my interest earned from NRE account now or when i bring that money back to Germany in future? I appreciate your helpful information. many thanks.

    • Reply Bastien - Settle in Berlin 06/07/2019 at 09:27

      Hey Chinna. This is a bit beyond my humble knowledge, better ask a professional. sorry.

  • Reply Michael 21/06/2019 at 19:20

    Bit of a different topic but surely relevant to people who have paid voluntary National Insurance Contributions in the UK to top up their pension there but are now / permanently resident in the BRD:
    I paid11 years’ worth of voluntary NI contributions to top up my UK old age pension last- Slowprocess butitwentthrouhj. Now receiving an increased UK pension. WIthaGerman peniosn, other sources of income and such I coulld / will be taxed in BRD on my total income. Is there any way off off setting the one-off voluntary NI contriutions against German tax? (I am after all potentially liable for more tax here). If so. How do you go about it? Which German tax form and which line on the tax form? Any experience out there?

  • Reply Carrie 12/06/2019 at 17:04

    Hi,

    I’d welcome some advice please on our family tax position. We are both earning salaries from UK employers, whilst working in Germany. Both our jobs are civil service, so we both fall under s18 of the Dual Taxation arrangements (ie tax is only due on that income in the UK). What I don’t know is how we go about informing the German authorities of this income, along with the exemption on it? I assume we have to file a german tax return in any event, but how do we declare this on our forms?

  • Reply Giorgio 30/05/2019 at 01:42

    Hi, I have a question. As I was working in Australia in first part of 2018, and then moved to germany in october, as Australia has a different taxation period )starts on july 1 and ends june 30), what income I should declare in germany, the one of the year 3017-2018 or 2018-2019? Otherwise, how would I be supposed to know exactly the taxable income for the period 01.01.18 to 31.08.18? The calculation of the taxable income is done by emplayer and taxation office from the payslips, it is calculated based on the Australian fiscal year, not the german one.

    • Reply Bastien - Settle in Berlin 01/06/2019 at 15:00

      Hey Giorgio. This is a great question. It’s out of my league i’m afraid. You need to ask a pro. Can’t you find a Facebook group of Australians living in Germany? Maybe they could help?

  • Reply Alex Jones 19/05/2019 at 00:19

    Hello Bastie, very nice post regarding tax for expats. My situation is the other wat round , I left germany to France and the accoutant in germany says that it is needed in my case to do a tax return. I have left germany on the end of May 2018 (abgemeldet) and started my new job on the 1 June 2018 but now the accountant is saying that in order to complete my tax return I need to provide my french payslips from June to December 2018 to be presented to finanzamt in germany for the tax return. Is this correct? I understand that once I left germany and logged off I have no longer any risk of tax liability. WHat do you think?

    • Reply Bastien - Settle in Berlin 22/05/2019 at 09:48

      Hey Alex. I’m in no way qualified to overrule the advice of a paid professional. You should probably trust them.

  • Reply lavida 18/05/2019 at 23:54

    I would love to know how to handle my current tax situation. I am Australian- German. Have lived in Australia but now since a year in Germany. I am now filing as non resident in Australia for tax purposes. Actually that scares me as I prefer paying tax there. My income is only in Australia although I work online from Germany atm. I feel in Germany I get taxed a lot more than in Australia plus the currency exchange rate is so bad that I pay from Australia to Germany loosing money and overpaying. All my income goes to Australia. anyway my situation is unique. Are there forums, international tax advisors or people you know that are in the same situation, I’d love to know what to do and how to be able to act right in this situation without loosing money.

    • Reply Bastien - Settle in Berlin 22/05/2019 at 09:47

      Hey Lavida. In theory, you would be considered a German resident since you were more than 180 days in Germany the past year. If you don’t know what to do, best is to talk to an English speaking tax consultant, which you can find this way for Berlin and other places.

    • Reply Ricky 24/05/2020 at 18:59

      Hey Lavida

      I know this is an old comment, but wondering how you went about this and if you have any tips/ a good Berlin Accountant to recommend as I’m in this situation.

      Cheers
      Ricky

  • Reply Dorothy joy Fuchs 18/05/2019 at 13:34

    Hi,
    I am resident in Germany but not German Citizen
    I work in United Arab Emirates
    Do i need to pay income tax in Germany?
    What is the basis of income tax? Is it only from your basic salary?
    My total salary consisting of:
    For example
    Basic Salary: 2000 euro
    Transportation allowance:1000 euro
    Housing allowance: 1000 euro
    TOTAL EURO received monthly 4000

    Should i declare only 2000 euro?

    • Reply Bastien - Settle in Berlin 22/05/2019 at 09:25

      Hey Dorothy. As a German resident, you ought to declare all income, regardless of their nature.

  • Reply Dan 14/05/2019 at 09:13

    Hi, Thank you for all the information, it is very useful.
    I just have a concern for our case. I moved and started to work in Germany in December of last year. Before that we leaved in France and I was working in Switzerland. All our incomes from there were declared to the TAX office in France and everything was in order.
    Should I include those incomes from Switzerland also in the TAX declaration in Germany even though they have been declared in France?
    Thanks

    • Reply Bastien - Settle in Berlin 17/05/2019 at 14:24

      Hey Dan. I can’t be sure because i am no expert, but i would stick to country of residence which is the same anyway.

  • Reply Swagnik Chatterjee 11/05/2019 at 23:36

    Hello,

    Thanks for the article but needed some further clarification. I am in Germany on a reunion visa for a period of about two months during which I will be receiving salary from my employer back in India. In Germany I am dependent on my wife who works with Daimler.
    1. What amount should be considered taxable in Germany?
    2. What tax declaration should I have to do?
    3. What tax return forms should I have to fill and submit?

    Looking forward to your reply.

    Regards,
    Swagnik Chatterjee

    • Reply Bastien - Settle in Berlin 17/05/2019 at 14:08

      Hey Swagnik. 1. Will you be considered a German resident for that year? If yes, then all income is taxable.
      2. If you are a German resident, you will need to do it in Germany
      3. Have you looked at this post?

  • Reply Lil-Eric 04/11/2018 at 23:48

    Hi, I wonder if you could consider this? If you sell a flat abroad (country with a treaty with Germany) and make capital gains taxed there, based on their rules – is that considered to be ‘global income’ for the year in Germany, and affect your tax bracket here? I mean, often capital gains on property is just whatever has been sunk into the place to make it more liveable, rather than ‘income’. Very curious.
    Thanks.

    • Reply Bastien - Settle in Berlin 07/11/2018 at 09:48

      Hey Lil-Eric. I see this is connected to your other comment. I think you’d need to check with a Steuerberater on this one to be sure. The extra lump-sum made from selling property won’t be taxed (or less taxed – income tax) if it’s reinvested somewhere else in a relative short amount of time (same year i think). So typically, selling something to buy something else is more lenient, as far as income tax is concerned. Again, just an educated guess, get in touch with a steuerberater to be sure.

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