Residence and habitual abode
Residence, habitual abode, relocation, secondary residence and family situation may affect German tax liability.
International tax matters & DTA
Tax advice on cross-border matters, foreign income, double tax treaties, withholding tax, moving to or from Germany and activities with a foreign connection.
International matters require careful review of unlimited or limited tax liability, affected income categories and applicable double tax treaties.
When does an international tax matter arise?
A foreign connection can arise in many different constellations. It is not enough to look only at where payment is received or where a person lives at a specific point in time.
Foreign income
Employment income, self-employment income, rental income, pensions, capital income or business income from abroad must be classified separately.
Foreign tax and withholding tax
Foreign tax withheld may be creditable, exempt or not creditable depending on the applicable rules and treaty.
Double tax treaties
Double tax treaties allocate taxing rights between states. The exact article and type of income must be checked carefully.
Typical advisory areas
Foreign rental income
Classification of foreign rental income, expenses, depreciation, foreign tax and consideration in the German tax return.
Employment abroad
Work abroad, cross-border commuting, home office, employer location and salary taxation.
Foreign capital income
Tax certificates, withholding tax, foreign custody accounts, exchange rates and German reporting obligations.
Moving to or from Germany
Tax residence, year of arrival or departure, split-year issues, foreign income and German filing obligations.
Self-employed cross-border activity
Services for foreign clients, place of supply, VAT, permanent establishment questions and foreign tax registrations.
Pensions and other recurring payments
Foreign pensions, social security payments and treaty classification.
Classifying double tax treaties correctly
Double tax treaties do not automatically mean that income is not taxed in Germany. They determine which state may tax and whether Germany applies exemption, credit or another mechanism.
Type of income first
The relevant treaty article depends on whether the income is employment income, business income, rental income, pensions, capital income or another category.
Progression clause
Tax-exempt foreign income may still affect the German tax rate through the progression clause.
Foreign tax credit
Where the credit method applies, foreign tax may only be creditable within statutory limits and with appropriate evidence.
Documentation
Foreign assessments, withholding tax certificates, contracts, payslips and payment records are regularly needed.
Required information
The documents required depend on the specific facts. A tailored request is made after initial classification.
Personal situation
Residence, habitual abode, family situation, relocation dates, stays abroad and domestic or foreign homes.
Income documents
Foreign salary statements, pension documents, rental statements, tax certificates, invoices or profit determinations.
Foreign tax documents
Foreign tax assessments, withholding tax certificates, tax returns, payment evidence and correspondence with foreign authorities.
Contracts and factual details
Employment contracts, rental agreements, service contracts, travel days, place of activity and customer or employer details.
Process
Clarify facts
The countries involved, tax years, income types, residence situation and documents are identified.
Review German tax liability
Unlimited or limited tax liability and the affected German tax return obligations are reviewed.
Classify treaty position
The applicable treaty and income article are checked and the exemption, credit or other method is determined.
Implement in tax return or advice
The result is reflected in the German tax return or explained in a separate tax assessment, where commissioned.
Important limitation
Careful case-by-case review required
International tax matters are highly fact-dependent. This service does not replace foreign legal or tax advice. If foreign filing obligations or foreign legal questions arise, separate local advice may be required.