Ask a tax advisor on the topic of Double taxation

Pilot residing in Germany / working in Austria / where is he liable for taxes?

November 22, 2011 | 30,00 EUR | answered by Dipl.BW/SB Ulrich Stiller

Dear Sir or Madam,

I would like to request information, however, it is necessary that the person providing the information is familiar with Austrian and German tax law as well as the tax-specific regulations for aviation personnel:

I have been employed as a pilot at an Austrian airline since the middle of this year. My taxes and social security contributions have been automatically deducted by my company in Austria.

However, my place of residence is still in Germany (North Rhine-Westphalia).

My employer schedules me as follows:

17 consecutive days of work in different locations abroad, followed by 13 consecutive days off at home in Germany, including vacation days.

Therefore, I work 204 days per year abroad, mostly in Europe and the Far East. Stays in Germany or Austria during the 17-day work period are rare, only about 20 days per year in total.

Therefore, I do not spend more than 183 days in Germany or Austria per year.

As far as I know, I am not considered a "cross-border commuter".

As far as I know, there are special tax regulations for aviation and maritime personnel due to their international deployment, which prescribe that employees are taxed at the location of the airline company.

Now, my questions regarding the above situation:

1.) Is there a possibility for me to claim back the taxes paid in Austria based on the 183-day rule within the annual (Austrian) tax return?

2.) If 1.) is not possible, would there be another statutory regulation or exception for tax savings other than the 183-day rule?

3.) Do I still have to submit a tax return in Germany and how should I proceed there?

4.) Can the tax office in Germany demand taxes from me?

Thank you for your information!

Dipl.BW/SB Ulrich Stiller

Dear inquirer,

Thank you for your inquiry, which I would like to answer based on your information and in the context of your employment within the framework of an initial consultation as follows:

Since you have a residence in Germany, you are subject to unlimited income tax liability in Germany, generally with your worldwide income.

However, the Double Taxation Agreement with Austria applies in this case. According to Article 15 (5), your compensation will be taxed in Austria, as the seat of the airline is located there. The 183-day rule is governed by Article 15 (2) and (3). The 183-day rule does not apply to you, as paragraph 5 takes precedence.

Your salary in Germany is tax-free. However, it will increase the tax rate on other income within the context of unlimited income tax liability in Germany under the progression clause according to § 32b EStG, if you have any. Income of your spouse would also be considered in the case of joint assessment.

If you have additional income within the context of unlimited tax liability in Germany, you must file an income tax return and enter the tax-free income from your employment in Austria in Appendix N in order for the progression clause to be taken into account.

I hope I have been able to assist you in the context of your employment.

Best regards,

Ulrich Stiller
Tax consultant/Diplom-Betriebswirt