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Residence abroad Wife



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.

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 your income not subject to German income tax does not exceed the tax-free allowance. The tax-free allowance in 2024 is 11,784 Euro for single persons and 23,568 Euro for married couples. The tax-free allowance may be reduced according to the country group classification of the Federal Ministry of Finance.
  • You prove 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.

What conditions must be met to apply for unlimited tax liability?



Welche Regelungen gelten für Angehörige des öffentlichen Dienstes im Ausland ausserhalb der 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) do not have a residence or habitual 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 do not have a residence or habitual abode in Germany are also treated as having unlimited income tax liability, provided they have domestic 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.

Welche Regelungen gelten für Angehörige des öffentlichen Dienstes im Ausland ausserhalb der 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 the 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 2024 does not exceed 11.784 Euro (possibly reduced by one, two or three quarters according to the country group classification).

I worked as a harvest worker in Germany. How can I get a refund of the withheld income tax?



Which form do I need to use to apply for a wage tax refund?

In addition to the income tax forms (main form, Form N, etc.) and the income tax statement, you must submit the form "Certificate EU/EEA" or "Certificate outside EU/EEA", depending on your place of residence, on which your relevant foreign tax authority certifies your details.

The forms "Certificate EU/EEA" and "Certificate outside EU/EEA" are available in several languages and can be downloaded from our website, as can the other income tax forms.

Which form do I need to use to apply for a wage tax refund?



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 tax-free allowance in 2024 is 11.784 Euro for single persons and 23.568 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 whole range of family-related benefits. This includes, for example, the tax deduction for pension expenses, special expenses, extraordinary burdens.

There is a special advantage if you are a national 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 national 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.

When is it advisable to apply for unlimited tax liability?



What are family-related tax allowances?

Individuals residing abroad who earn and pay tax on the vast majority of their income in Germany can, under certain conditions, apply to be treated as fully liable to income tax in Germany (so-called cross-border commuters according to § 1 para. 3 EStG).

If you are a citizen of an EU/EEA member state and your spouse or child resides in an EU/EEA member state, you can benefit from family-related tax advantages:

  • Joint assessment with the splitting tariff or income tax deduction according to tax class III.
  • Doubling of spouse-related allowances and maximum amounts: special expenses allowance, maximum pension amount, saver’s allowance.
  • Relief amount for single parents. Maintenance payments to the divorced or separated spouse within the framework of real splitting.

If you wish to be treated as fully taxable from the beginning of the year or the start of employment, apply for a "Certificate according to § 39c para. 4 EStG" at the employer's business premises tax office and present it to the employer. This certificate includes the relevant tax class, the number of child allowances, and, if applicable, a tax-free allowance. To apply for this certificate, use the "Application for income tax reduction" and attach the "EU/EEA cross-border commuter annex".

In this annex, you must provide your expected domestic and foreign income and, if applicable, that of your spouse, and have it confirmed by the tax authority of the country of residence. You must enclose the "EU/EEA certificate" with your income tax return: This form must include the income taxed abroad - including that of your spouse - and be confirmed by the tax authority of the country of residence.

 

What are family-related tax allowances?



Overview of the most important annual average exchange rates for foreign currencies

The conversion of income in foreign currency must be done on a monthly basis using the Euro reference rate of the European Central Bank. The monthly exchange rates are determined by the Federal Ministry of Finance.

However, it is not objected if wage payments received in a foreign currency are converted on the basis of an annual exchange rate - calculated from the monthly published VAT reference rates, rounded down to the nearest 50 cents. (BMF letter dated 03.05.2018)

Overview of the most important annual average exchange rates for foreign currencies


Field help

Residence in Germany

Specify the period in which you were resident in Germany in 2024.

Please only provide information here if you moved to Germany or moved abroad during the course of 2024.

If you had your residence partially in Germany and partially abroad during the tax year, you were not fully taxable in Germany for the entire year. For the period that you lived in Germany, you are a fully taxable person.

The foreign income received beyond this period and which is not liable to German income tax is taken into account in the calculation of income tax (so-called "progression clause" (Progressionsvorbehalt)).

Foreign income

Enter the total amount of foreign income that is not subject to German income tax. The income to be declared is the income received minus the expenses claimed.

Example: You have earned income abroad as an employee from January to July 2024. To determine the foreign income, you should deduct the foreign income-related expenses actually incurred in full from the foreign income (here: the foreign gross income).

Under German tax law, foreign income is only taken into account when calculating the tax rate that is applied to your taxable German income (progression clause).

The foreign income must be determined in accordance with German tax law. In accordance with section 34d of the Income Tax Act (EStG), the total foreign income is comprised of:

  • Income from agriculture and forestry carried on in a foreign state,
  • Income from commercial business abroad,
  • Income from self-employment carried out abroad,
  • Income from the sale of assets abroad,
  • Income from employment abroad,
  • Income from capital assets if the debtor has a residence, management or registered office abroad or if the capital assets are secured by foreign real estate,
  • Income from renting and leasing abroad and
  • Other income earned abroad.

The conversion of income in foreign currency must be done on a monthly basis using the European Central Bank's euro reference rate. However, it is not objectionable if wage payments received in a foreign currency are converted on the basis of an annual conversion rate - determined from the monthly published VAT reference rates, rounded down to the nearest 50 cents. (Ministry of Finance (BMF) letter dated Dec. 14, 2014)

Here is an overview of the annual conversion rates for the key foreign currencies.

The country in which the income was earned (wife)

Select the country from which the foreign income that is not subject to German income tax originates.

Please provide information here only if you moved to Germany or abroad in 2024.

Foreign income

Enter the total amount of foreign income that is not subject to German income tax. If you did not have any foreign income, enter "0" here.

If applying for unlimited tax liability or applying for the personal and family-related tax benefits, the amount of foreign income earned during the time abroad which was not subject to German income tax must be checked.

This income is taken into account when determining your tax rate (so-called "progression clause (Progressionsvorbehalt)". This means that the income is used as the basis for stipulating the rate of tax you need to pay on your taxable income.

The conversion of income in foreign currency must be done on a monthly basis using the Euro reference rate from the European Central Bank. However, it is not objectionable if wage payments received in a foreign currency are converted on the basis of an annual conversion rate - determined from the VAT reference rates published monthly, rounded down to the nearest 50 cents. (Ministry of Finance (BMF) letter dated 14.12.2014)

Here is an overview of the annual conversion rates for the key foreign currencies.

Did Partner A have another place of residence outside of Germany in 2024?

Select "yes" if you had one or more additional residences abroad in 2024 alongside your current address.

This also applies to residences outside Germany that were occupied or registered for a period of time.

You can provide the full address on the next page.

Did Partner A move to Germany or abroad in 2024?

Select "yes" if you either moved to Germany or moved abroad. Select "no" if your residence did not change throughout the year.

A change of residence during the year means that you are only fully taxable in Germany during your stay.

Foreign income earned during your stay abroad is generally tax-free in Germany, but it may increase the tax rate through the progression clause.

... including foreign investment income

Specify the foreign capital gains which are subject to withholding tax or which would be subject to withholding tax in Germany.

If applying for unlimited tax liability or applying for the personal and family-related tax benefits, the amount of foreign income earned during the time abroad which was not subject to German income tax must be checked.

Income in foreign currency must be converted on a monthly basis using the euro reference rate of the European Central Bank. If wages are paid in the currency of the country of employment, they must be converted at the monthly average euro reference rate published by the European Central Bank (Ministry of Finance (BMF) letter dated 3.5.2018 ( IV B 2 - S 1300/08/10027, BStBl 2018 I p. 643).

Here is an overview of the annual conversion rates for the key foreign currencies.

... extraordinary income included therein

Specify the total extraordinary income that is not subject to German income tax.

Extraordinary income includes in particular:

  • Remuneration for activities lasting several years
  • Capital gains
  • Compensations within the meaning of § 24 No. 1 Income Tax Act (EStG)

If applying for unlimited tax liability or applying for the personal and family-related tax benefits, the amount of foreign income earned during the time abroad which was not subject to German income tax must be checked.

Extraordinary income must be taken into account when determining the tax rate, (so-called "progression clause (Progressionsvorbehalt)"). This means that the income is included at the rate of one-fifth when determining your tax rate but not when determining your taxable income.

The conversion of income in foreign currency must be done on a monthly basis using the Euro reference rate from the European Central Bank. However, it is not objectionable if wage payments received in a foreign currency are converted on the basis of an annual conversion rate - determined from the VAT reference rates published monthly, rounded down to the nearest 50 cents. (Ministry of Finance (BMF) letter dated 14.12.2014)

Here is an overview of the annual conversion rates for the key foreign currencies.

... extraordinary income included therein

Specify the extraordinary income according to sections 34 and 34 b Income Tax Act (EStG). This must be income which is not subject to German income tax.

Extraordinary income includes in particular:

  • Remuneration for activities lasting several years
  • Capital gains
  • Compensations within the meaning of sect. 24 No. 1 Income Tax Act (EStG)

Extraordinary income must be taken into account when determining the tax rate, (so-called "German progression clause (Progressionsvorbehalt)"). This means that the income is included at the rate of one-fifth when determining your tax rate but not when determining your taxable income.

The conversion of income in foreign currency must be done on a monthly basis using the European Central Bank's euro reference rate. However, it is not objectionable if wage payments received in a foreign currency are converted on the basis of an annual conversion rate - determined from the monthly published VAT reference rates, rounded down to the nearest 50 cents. (Ministry of Finance (BMF) letter dated Dec. 14, 2014)

Here is an overview of the annual conversion rates for the key foreign currencies.

Did Partner A live outside of Germany for the entire year 2024?

Select "yes" if you had neither a residence nor a habitual abode in Germany for the entire year 2024.

This information is relevant for determining whether you are subject to limited or unlimited income tax liability.

The conditions for applying for unlimited tax liability and possible tax benefits are queried further down on this page and are based on your details regarding residence, income, and nationality.

Capital gains subject to German withholding tax

Capital gains subject to German withholding tax

Did Partner B live in an EU/EEA country or Switzerland in 2024?

Select "yes" if you had your residence or usual place of abode in an EU/EEA country or Switzerland in 2024 – even temporarily.

This information is important because certain tax benefits (e.g. deduction of special expenses, spouse splitting, child allowance) are only granted if the residence was within the EU/EEA area or Switzerland.

Note: Even in the case of shared residence arrangements (e.g. Germany and EU abroad), "yes" must be selected if there was at least one residence in the EU/EEA area or Switzerland.

Did Partner A reside at least temporarily in a low-tax country?

Select "yes" if you lived in a low-tax country (so-called low-tax country) at least temporarily after moving out of Germany in 2024.

This information is only required if you moved abroad from Germany during the year 2024.

If you select "Yes", the tax office will check whether extended limited tax liability applies under § 2 AStG. This may mean that you remain subject to income tax in Germany on all income for up to 10 years after moving away – unless it concerns certain foreign income as defined in § 34c para. 1 EStG.

What is considered a low-tax country?

A country is considered to have low taxation if:

  • the income tax for a single taxpayer with a fictitious income of 77,000 Euro is more than one-third below the German level,
  • or a preferential tax rate (e.g. for foreign investors) is granted.

In case of doubt, the Federal Central Tax Office decides whether a low-tax country is involved (BMF letter dated 14.05.2004: Principles for the application of the Foreign Tax Act).

 

Tax deduction amounts according to sect. 50a of the Income Tax Act (EStG)

The following income of foreign payment creditors subject to limited tax liability (sect. 49 Income Tax Act (EStG)) is subject to the tax deduction procedure pursuant to sect. 50a of the Income Tax Act (EStG):

  • Income generated by artistic, sporting, artistic, entertainment or similar performances (e.g. entrance fees, royalties, prize money, remuneration for participation in talk shows) and their domestic utilisation.
  • Income from the transfer of rights utilised in Germany, for example, licences and copyrights (film rights, music rights, patent rights, etc.) but also of industrial, technical, scientific and similar experience, knowledge and skills ("know-how").
  • Income from supervisory board duties in domestic companies.

The debtors of the remuneration paid are obligated to withhold, pay and declare taxes. The Federal Central Tax Office is responsible for carrying out the tax deduction procedure.

Income in a foreign currency must be converted on a monthly basis using the European Central Bank's Euro-reference rate. The monthly conversion rates are determined by the Federal Ministry of Finance.

However, there are no objections if the salary payments received in a foreign currency are converted with an annual exchange rate that is calculated on the basis of the monthly VAT reference exchange rates and rounded to full 50 cents. (Letter of the Federal Ministry of Finance dated 14.12.2014)

Did Partner A hold a share in a corporation?

Indicate here if you held a significant interest in a corporation or cooperative as defined in section 17 EStG in 2024.

This information is only required if you moved to Germany or abroad during the year 2024. In these cases, an exit tax under section 6 AStG may be relevant.

Important: This does not concern ordinary shares or traded securities in your portfolio.

Only significant interests of at least 1% of the shares you held at any time during the year are recorded – e.g. in a GmbH or comparable corporation.

The information is used for the correct tax assessment of any hidden reserves when changing residence.

Did Partner B earn income abroad in 2024?

Please select "yes" if the spouse earned income from abroad in 2024.

Income that is not subject to German income tax must be proven by a statement from the relevant tax authority in your home country. If you are a citizen of a member state of the European Union (EU) or of the EEA states Liechtenstein, Norway or Iceland and reside in one of these countries, use the form "Statement EU / EEA", otherwise the form "Statement outside EU / EEA".

Tax deductions on income (excluding pension income)

If you are subject to limited tax liability in Germany, tax deduction amounts will be withheld.

If you apply for unlimited tax liability, the tax deduction amounts already withheld are treated as advance payments.

You can only apply for unlimited tax liability if you also earn income in Germany. If you live abroad and continue to earn income in Germany, you are subject to limited tax liability.

In order to claim personal and family tax benefits, you must apply for unlimited tax liability.


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