What is the difference between cross-border commuters and cross-border workers?
Cross-border commuters live abroad and earn their income predominantly in Germany. They can apply to be treated as fully liable to income tax in Germany if certain conditions are met (§ 1 para. 3 EStG):
- Relative limit: At least 90% of total income is from Germany, or
- Absolute limit: Income earned abroad does not exceed the basic allowance. This amounts to 2025:
- 12.096 Euro for single persons
- 24.192 Euro for married couples
Cross-border commuter arrangements with certain countries
Cross-border commuters live in Germany and work in a neighbouring country – or vice versa. They usually commute daily between their place of residence and place of work. Special rules apply to them depending on the country under the double taxation agreements (DBA):
- France: 20 km border zone on both sides of the border
- Austria: 30 km border zone on both sides of the border
- Switzerland: No fixed border zone anymore. It is sufficient to commute regularly.
Taxation: Wages are taxed in the country of residence. German cross-border commuters therefore submit an income tax return in Germany. In addition to Form N, Form N-Gre must also be completed (§ 46 para. 2 no. 1 EStG).
No cross-border commuter status with other countries
There is no special cross-border commuter arrangement for Luxembourg, Belgium, the Netherlands, Denmark, Poland, and the Czech Republic. The general taxation rule applies: Wages are taxed in the country of employment. In Germany, the wages remain tax-free but are subject to the progression clause, which can increase the tax rate for other domestic income.
Note on home office periods
Many double taxation agreements (e.g. with France, Luxembourg, Belgium) have now introduced fixed tolerance limits for home office days. Such days are considered harmless for cross-border commuter status up to a certain extent (e.g. 34 days per year). As the regulations vary depending on the country, it should be checked on a case-by-case basis whether the right of taxation still belongs to the country of residence.
