---

What is considered foreign income?

You can earn foreign income from various types of income. The type and amount must be determined according to German tax law in accordance with § 34d EStG. The deduction of income-related expenses and business expenses is therefore based on the Income Tax Act.

• For income from employment, the work must be performed abroad. It can also be utilised abroad without being carried out in Germany.
• For income from self-employment, the work must be performed or utilised abroad (e.g. authors' rights).
• For income from business operations, the income must be generated through a business establishment located abroad.
• For income from agriculture and forestry, the land cultivated must be located abroad.
• For income from capital assets, the capital assets must be secured by foreign property, for example.
• For income from renting and leasing, the property must be located abroad or the rights (e.g. authors' rights) must be granted for use abroad.

(2022): What is considered foreign income?

---

What is withholding tax?

If you are resident in Germany, foreign investment income is taxable in Germany. Foreign countries often withhold a withholding tax on your foreign investment income.

If the withheld withholding tax is higher than permitted under the double taxation agreement (DTA), apply for a refund of the overpaid withholding tax from the foreign tax authority.

For foreign investment income subject to foreign withholding tax, this has been credited against the withholding tax since 2009.

(2022): What is withholding tax?