What tax implications should I consider for a partial stay abroad?
If you only had a temporary residence in Germany during the tax year, you must provide the relevant information here. This applies if you moved away from Germany or returned/moved to Germany.
In this case, income earned in Germany after moving away or before moving to Germany is included in the assessment. Income earned abroad after or before this period is not taxed in Germany. However, it is included in the calculation of the progression clause, which results in a higher tax rate for taxable income.
(2023): What tax implications should I consider for a partial stay abroad?
What conditions must be met to apply for unlimited tax liability?
If you have neither a residence nor a habitual abode in Germany, you can apply to be treated as fully liable for income tax (fictive unlimited tax liability).
The conditions for this are:
- You are a natural person.
- You have domestic income.
- At least 90% of your income in the calendar year is subject to German income tax, or the income not subject to German income tax does not exceed the tax-free allowance. The tax-free allowance in 2023 is 10.908 Euro for single persons and 21.816 Euro for married couples. The tax-free allowance may be reduced according to the country group classification of the Federal Ministry of Finance.
- You provide proof of the amount of income not subject to German income tax with a certificate from the relevant foreign tax authority. For this purpose, you must submit the form "Certificate EU/EEA" or "Certificate outside EU/EEA" together with your tax documents.
(2023): What conditions must be met to apply for unlimited tax liability?
What regulations apply to public sector employees abroad outside the EU?
For civil servants and public sector employees residing abroad, the following rules apply:
- Individuals with unlimited income tax liability also include German nationals who (1) have neither a residence nor their usual place of abode in Germany and (2) are employed by a German legal entity under public law and receive wages from a German public fund, as well as household members who are German nationals or have no income or only income that is exclusively subject to income tax in Germany. This includes all persons with diplomatic or consular status.
- Upon application, natural persons who have neither a residence nor their usual place of abode in Germany are also treated as having unlimited income tax liability, provided they have German income within the meaning of § 49. This includes persons without diplomatic or consular status who apply to be treated as having unlimited tax liability (§ 1 para. 3 EStG). Only if the residence is in an EU/EEA state are they entitled to both personal and family-related tax benefits.
(2023): What regulations apply to public sector employees abroad outside the EU?
I worked as a harvest worker in Germany. How can I get a refund of the withheld income tax?
If you have stayed in Germany only temporarily and not for a continuous period of more than 6 months, you are subject to limited income tax liability in Germany for the relevant calendar year. Income tax is generally settled through wage tax deduction.
However, you can apply for a refund of the wage tax if the income earned in Germany accounts for at least 90% of your total income or if your income not earned in Germany in 2023 does not exceed 10.908 Euro (possibly reduced according to the country group classification by one, two or three quarters).
(2023): I worked as a harvest worker in Germany. How can I get a refund of the withheld income tax?
When is it advisable to apply for unlimited tax liability?
Individuals who live abroad and earn and pay tax on the vast majority of their income in Germany can apply to be treated as fully liable to income tax in Germany under certain conditions (so-called cross-border commuters according to § 1 para. 3 EStG).
Whether this is possible depends solely on certain income limits:
- The domestic income taxed in Germany must account for at least 90% of the total income (relative limit). Or
- the foreign income not taxed in Germany must not exceed the tax-free allowance (absolute limit). The basic allowance in 2023 is 10.908 Euro for single persons and 21.816 Euro for married couples.
The advantage of unlimited tax liability on application is that, unlike with limited tax liability, you can claim all personal tax benefits as well as a number of family-related benefits. These include, for example, the tax deduction for pension expenses, special expenses, extraordinary burdens.
There is a special advantage if you are a citizen of an EU/EEA member state and your spouse or child resides in an EU/EEA member state. It is not necessary for the spouse to also be a citizen of an EU/EEA member state. In this case, you can also benefit from family-related tax advantages: These include joint assessment with the splitting tariff or income tax deduction according to tax class III, the doubling of marriage-related allowances and maximum amounts such as the special expenses allowance, maximum pension amount, saver’s allowance, and the relief amount for single parents.
(2023): When is it advisable to apply for unlimited tax liability?
