Residence in Switzerland, apartment in Germany purchased.
September 25, 2011 | 30,00 EUR | answered by Dr. Yanqiong Bolik
Hello,
I am working in Switzerland and registered there, as is my wife (both with a "B permit"). We have now purchased an apartment in Germany (just across the border, for personal use). What do I need to consider and what tax implications will there be for me?
Dear inquirer,
Thank you for your inquiry, which I am happy to answer taking into consideration your input and the rules of this platform.
Please note that my explanation is based on the situation presented, and that adding, omitting, changing information, or the ambiguity of information can change the tax result.
Based on your information, I assume that you and your wife did not have a residence or habitual abode in Germany before purchasing the apartment. If you did not earn any income in Germany, you were not subject to income tax until the purchase of the apartment in Germany.
By using the purchased apartment for your own private residential purposes, you establish a residence in Germany. Therefore, you are considered unlimited tax resident in Germany from this point onwards. The income earned in Switzerland will also be taken into account in the income tax assessment according to the principle of worldwide income.
Depending on the type of income, the taxation rights are allocated to either Germany or Switzerland according to the tax treaty between the two countries. To avoid double taxation, either the exemption method (possibly with progression clause) or the credit method is applied depending on the type of income.
I hope this overview was helpful to you.
Sincerely,
Dr. Yanqiong Bolik
Tax consultant
Bildstöckle 6, 70567 Stuttgart
Tel: +49 (0)711 / 9332 2657
Email: info@zdbz.de
