Double taxation agreement D - Malta -- Flight personnel -- Clawback clause Income Tax Act
This question for advice is addressed to a tax advisor who is familiar with the topic of the Double Taxation Agreement between Germany and Malta, specifically Article 15(3) of the DTA D/Malta concerning flight personnel, and in this context with Section 50d(8) and (9) of the German Income Tax Act (EStG).
Background:
I am a pilot and since 01.01.16, my airline has offered all employees Maltese employment contracts due to a relocation of the company's headquarters from Salzburg to Malta. Therefore, I am now effectively employed by a Maltese company as an employee. My place of residence and center of life is still in Germany, and I carry out my work on Maltese-registered aircraft worldwide, but not in Germany or Malta itself.
Since 01.01., the new EU regulation for flight personnel applies to me, which stipulates that social security contributions and health insurance premiums must now be paid in the employee's country of residence, not at the company's headquarters.
Therefore, the following situation arises:
-The state of Malta does not require me to pay any income tax, as I do not have my residence there. I have a standard certificate from the Maltese tax authorities stating that no taxes are levied due to my lack of residence there.
-Health insurance contributions, including retirement and social security, are paid in Germany through a German service provider/tax office.
This situation is very favorable for me, as I do not have to pay any taxes.
Questions regarding the situation:
-The DTA D/Malta in Paragraph 15 provides that Malta has the right to tax, but there is a fallback clause in which Germany still wishes to secure taxation contrary to the DTA regulations, namely in Section 50d(8) and (9) of the EStG. According to my information, this has been considered unlawful in numerous court rulings by the tax authorities. A recent decision by the Federal Constitutional Court (BVerfG) did not fundamentally consider this provision unconstitutional.
Questions:
1.) Technically, I should not have to pay taxes in Germany if Malta does not require them. Is this the case for me as well? Even considering the recent BVerfG rulings on the constitutionality of fallback clauses?
2.) If not: Is there a way to save taxes or completely avoid them due to my specific situation?
3.) Is there an automatic process in which the health insurance or pension insurance will report the contributions paid to the tax office? I ask this question because my local tax office agreed in the past, at my request, that I do not have to file a tax return in Germany anymore since the salaries previously taxed in Austria (before 01.01.) were fully subject to the DTA D/A and the German tax return was always done pro forma by me, as I have no other income in Germany.
4.) How should I proceed now? Should I withhold the income from Malta from the tax office, assuming it might be tax-free in Germany anyway, or should I officially apply for an exemption due to the new contractual situation resulting from employment in another country with a DTA?
Thank you in advance for your efforts. I look forward to your response.
Yours sincerely.
