What tax aspects do I need to consider as an employee when moving abroad?
January 26, 2024 | 50,00 EUR | answered by Ulrike Voss
Dear Tax Lawyer,
My name is Marco Rüppel and I am currently employed as a permanent employee in Germany. However, I am planning to move abroad in the near future to take on a new professional challenge. In this context, I have some tax-related questions and uncertainties that I would like to clarify.
First of all, I am unsure about the tax aspects I need to consider as an employee when relocating my residence abroad. Are there any special regulations or requirements that I need to take into account? How will the move affect my tax liability in Germany? Do I still have to pay taxes in Germany even if I work abroad?
I am also concerned about potential double taxation situations. How can I avoid having to pay taxes in both the foreign country and Germany? Are there any specific agreements or regulations that can help me in this case?
Additionally, I am interested in whether there are any tax benefits or incentives that I can take advantage of when working abroad. Are there specific ways to reduce or optimize my tax burden?
Overall, I am looking for comprehensive advice to best manage my tax situation when moving abroad. What steps and measures can I take to be optimally positioned for tax purposes and minimize potential risks?
Thank you in advance for your support and expertise.
Sincerely,
Marco Rüppel
Dear Mr. Rüppel,
Thank you for your inquiry regarding the tax aspects of moving abroad as a salaried employee. Moving abroad can indeed have tax implications that need to be considered. I will answer your questions in detail below.
Firstly, as an employee relocating abroad, you must consider the tax regulations of the country you are moving to. The taxation of income typically depends on where you are resident and where you earn your income. Germany taxes the income of its citizens worldwide, so you will still need to file a tax return in Germany even if you are working abroad. However, there may be taxation of your income in both the foreign country and Germany.
To avoid double taxation, there are various double taxation agreements (DTAs) that Germany has signed with other countries. These agreements specify which country will tax which income, thus preventing double taxation. It is important to familiarize yourself with the DTA between Germany and the country you are moving to, and potentially apply for a residency certificate.
Regarding tax benefits related to working abroad, there are various options that can reduce your tax burden. These include offsetting foreign taxes against your German tax liability, tax allowances, or specific incentives for employees working abroad. It may be beneficial to seek advice from a tax advisor or a specialist in tax law to explore and utilize the best options for you.
Overall, it is advisable to inform yourself early on about the tax aspects of moving abroad and potentially seek professional assistance to minimize risks and optimize your tax situation.
I hope this information is helpful to you and I am available for further questions.
Best regards,
Ulrike Voss
Tax Lawyer
