Severance pay in Germany, residence in Austria.
February 3, 2012 | 20,00 EUR | answered by Dipl.BW/SB Ulrich Stiller
Hello,
My company in Germany is closing down and I will receive a severance payment. After the termination of my employment contract, I will register my main residence in Vienna. My family will continue to live in Munich and I am also registered in Munich. According to the authorities, deregistration was not necessary.
I want to tax the severance payment in Austria due to the double taxation agreement. What is required (e.g. 6 months residency in Austria, no residency in Germany, etc.) to be able to benefit from this agreement. The tax rate should be more favorable.
Can I ask my employer to tax the severance payment in Austria? Is that possible? How does it work?
Thank you for the initial information.
Regards
MC
Dear Seeker,
Thank you for your inquiry, which I would like to answer based on your information and in the context of your situation in a first consultation as follows:
I am sorry to disappoint you. You will have to pay taxes on the severance payment in Germany. Despite moving solely to Austria, you are still subject to unlimited income tax liability, as you have a residence in Germany, where your family resides and you do not intend to separate from them.
Even if you do not have a tax residence in Germany, the severance payment will still be taxed in Germany. A consultation agreement deviating from the double taxation agreement between Germany and Austria was made (BMF 26.8.2010, IV B 2 - S-1301-AUT, BStBl I 10, 645). According to this agreement, the severance payment will be taxed in Germany even after moving, as your regular income from the employment was also taxed there.
I hope I could assist you with the promised 20€.
Best regards,
Ulrich Stiller
Tax consultant/Diploma in Business Administration
