Can I avoid double taxation on my salary earned abroad?
November 11, 2022 | 115,00 EUR | answered by Yvonne Schreiber
Dear tax advisor,
My name is Erwin Eberstark and I am currently working for a company abroad, which pays me my salary monthly. However, I have recently learned that I have to pay taxes on this income both in the foreign country and in Germany, leading to double taxation.
This situation is causing me great concern, as I fear that I could lose a significant portion of my income as a result. I would like to know if there is a way to avoid double taxation on my foreign salary.
I would be very grateful if you could provide me with possible solutions to avoid this tax issue. Are there any special regulations or agreements between my country of residence and the foreign country that could help me avoid double taxation?
Thank you in advance for your assistance and I look forward to your expert advice.
Sincerely,
Erwin Eberstark
Dear Mr. Eberstark,
Thank you for your inquiry regarding the double taxation of your income from abroad. It is understandable that this situation is causing concern for you, as double taxation can lead to significant financial losses. I would like to offer you some possible solutions to avoid this tax issue.
Typically, countries avoid double taxation through so-called Double Taxation Agreements (DTAs). These agreements are made between two countries to ensure that income is not taxed twice. Germany has signed such agreements with many countries to prevent double taxation. Therefore, it is advisable to check if there is such an agreement between your country of residence and the country where you work.
Another possible approach to avoid double taxation is the tax credit method. In this method, the tax paid abroad is credited against the tax owed in Germany. This way, double taxation is avoided and you do not end up paying more taxes overall than you would in one country.
It is important that you seek advice from a professional tax advisor to find the best solutions for your specific situation. Each case can be unique, and it is important to consider all relevant aspects to find the best possible tax solution.
I hope that this information has been helpful to you. If you have any further questions or would like a more detailed consultation, I am at your disposal. Thank you for your trust, and I wish you all the best for your tax situation.
Best regards,
Yvonne Schreiber
