Employer Austria Residence Germany
August 23, 2010 | 25,00 EUR | answered by StB Kiehne Katja Kiehne
Good day,
My place of residence is in Germany, but I am employed by an Austrian company. My entire salary is processed through Austria, from social security to income tax. It means that according to § 3 EStG 1988, Austrian Income Tax Act, I am exempt from taxes as I am constantly working in different countries. Not in Germany and not longer than 1 month in the same place.
Now my question is, do I have to pay taxes in Germany, even though I am tax exempt in Austria?
I am happy to answer your inquiry as part of an initial consultation as follows.
Due to your residence, you are subject to unlimited income tax liability in Germany. If the salary is not charged to Germany (e.g. to a subsidiary or parent company), Austria has the right to tax. Exemption in the assessment will only be granted if the taxpayer can prove, regardless of the agreement, that the state entitled to tax under the agreement has waived this tax right or that the taxes imposed on the income in that state have been paid (§ 50d paragraph 8 of the Income Tax Act). You should be able to prove the Austrian tax exemption through a formal letter, for example, from the local tax authorities to the German tax office. Whether there will be a tax repayment in Germany depends on whether you have other taxable income in Germany. Because the salary received in Austria is tax-free here, but is subject to the so-called progression clause. This means that these income are taken into account when calculating the tax rate. This tax rate is then applied to your taxable income in Germany. This can lead to tax repayments.
Best regards,
Katja Kiehne
Tax consultant
Dipl.-Finanzwirtin (FH)
