DBA Article 4-2-c determines that nationality is the tax residence.
September 7, 2016 | 50,00 EUR | answered by StB Patrick Färber
Hello
I am self-employed and planning to have two apartments, one in Germany (currently) and one in Austria (Vienna additionally).
Economically, my main center of life is expected to be in Austria in 2017 (70-80% of income). However, my personal center of life is in Germany (girlfriend, parents, family). Renting an apartment in Vienna (instead of staying in a hotel) is due to a large/long project.
Therefore, I believe I have a habitual residence in both countries, as I keep returning and short interruptions do not break the habitual residence. That means I am in both countries for more than 184 days.
According to the tax treaty Article 4 (2)(c), nationality counts as tax residency. Is that correct?
I want to avoid becoming liable for taxes in Austria and being subject to the regulations for freelancers in Austria (pension, etc.).
Dear questioner,
Your explanations regarding the interpretation of the relevant "residency article" correspond to the correct examination sequence. According to your solution, you only arrive at the solution DE at the last stage.
In my opinion, your residency is already established in the first stage at the center of vital interests. Although personal and economic interests are in two countries.
However, according to the case law in DE and the opinion of the tax authorities, residency is typically seen in the partner who stays "at home" (here in DE) even in the case of spouses (classic case: husband works abroad, family/children stay in DE, usually visiting on weekends).
This can also be applied to unmarried individuals. However, you should consult with a tax advisor in Austria to determine if residency under the tax treaty is interpreted differently there.
Without being able to examine this point further, I would like to provide you with the following hint: if you are considered a resident in DE and at the same time have a permanent establishment/fixed place of business in AUT according to Articles 7/14 in conjunction with Article 24 of the DBA AUT, you would have to pay taxes on those earnings in AUT while being exempt in DE. In this case, you would not achieve your goal of not having tax liability in AUT. Therefore, consult with a tax advisor in AUT beforehand to determine how you can avoid having a fixed place of business.
I hope that, based on the fee paid for this initial consultation, I was able to provide you with some guidance!
