Working in Qatar Tax liability in Germany for income in Qatar and rent in Germany
September 16, 2013 | 35,00 EUR | answered by Steuerberater Thomas Textoris
Good day!
Next year in March, my family and I (we are all German citizens) are moving to Qatar for 5 years. I have a local contract in Qatar (not a secondment contract) starting from 01.03.2014. My wife is currently on parental leave (and it will be extended accordingly for the next few years). I want to change my residence to Qatar in order to take advantage of the tax benefits there.
How should I proceed in order to not be liable for taxes in Germany during this period? (Deregistration at the residents' registration office, communication with the tax office, etc...)
Just for your information: we have a condominium and plan to rent it out. What do I need to consider in order to avoid having to pay taxes in Germany on my income from renting in Qatar?
How will my rental income in Germany be taxed? At what tax rate and do I need to submit an income tax return? Do I also need to report my income in Qatar to Germany in this case? (Do I need to rent out the apartment before leaving for Qatar? Or does this need to happen at some point in 2014?)
I hope you can shed some light on this matter.
Thank you very much!
Dear questioner,
In the context of an initial consultation and considering the regulations of this forum, I would like to answer your question.
In Germany, unlimited income tax liability only arises if one has a residence or habitual abode in the country (more than 183 days) according to § 1 (1) EStG.
If your spouse and minor children maintain the German residence or continue to live in Germany, this may (in individual cases) lead to the attribution of a German residence to the relocating person. Since your family is moving with you to Qatar, your relocation should be recognized for tax purposes! From a registration perspective, you are required to deregister in Germany with the appropriate authority! Separate deregistration with the tax office is not required.
Since you are only moving to Qatar on 01.03.2014, you are still subject to unlimited income tax liability in Germany in 2014 (§ 2 (7) EStG). Your income in Qatar must be declared in the 2014 tax return, and you are subject to the progression clause according to § 32b (1) No. 2 EStG.
From 2015 onwards, you will be subject to unlimited tax liability in Qatar according to the local regulations. Rental income would be subject to limited tax liability in Germany according to § 1 (4) EStG in conjunction with § 49 (1) No. 2 f EStG. Your income in Qatar does not need to be declared in this case.
No basic tax allowance is granted to those with limited tax liability (§ 50 (1) sentence 2 EStG). Numerous personal and family-related benefits are not taken into account when assessing limited tax liability. For example, exceptional expenses are not deductible for tax purposes, and joint taxation for married couples cannot be claimed. Child allowances are also not granted. In simplified terms, "every" euro of rental income in Germany is subject to taxation.
As mentioned above, rental income in 2014 would still be subject to unlimited income tax liability. Your personal and family-related benefits (as mentioned above) will still be granted to you. Whether the rental occurs before or after your departure is up to you, there is nothing to consider from a tax perspective (see my explanations above).
I hope this sheds enough light on the matter.
Best regards,
Thomas Textoris
Tax consultant
