How are stays abroad taken into account for tax purposes?
May 3, 2023 | 50,00 EUR | answered by Dietrich Hohenadel
Dear tax advisor,
My name is Alexander Tressel and I have been working for an internationally active company for several years. Lately, I have been on more frequent business trips abroad, each lasting several months. This raises the question for me of how these overseas stays are treated for tax purposes.
Currently, I have my primary residence in Germany and am registered here. During my stays abroad, I continue to receive my salary from my German employer, which is deposited into my German bank account. Additionally, there are extra expenses incurred during my time abroad, such as accommodation and meals on-site.
My concern now is the extent to which these overseas stays are relevant for tax purposes and whether I may be subject to double taxation. How are foreign income treated for tax purposes and are there ways to avoid tax disadvantages? Can I, for example, deduct certain expenses during my overseas stay from my taxes?
I would greatly appreciate it if you could assist me with this matter and provide possible solutions. I would also like to have an assessment on how I can best prepare to avoid tax pitfalls.
Thank you in advance for your support.
Best regards,
Alexander Tressel
Dear Mr. Tressel,
Thank you for your question regarding the tax treatment of your professional stays abroad. It is understandable that you are concerned about how these stays are relevant for tax purposes and whether there are ways to avoid tax disadvantages.
First of all, it is important to know that the tax treatment of stays abroad depends heavily on various factors, such as the duration of the stay, the country in which you are staying, and the tax regulations between Germany and the respective country. In your case, since you continue to receive your salary from your German employer and have it transferred to your German account, it is likely that you are still liable for tax in Germany.
However, income from abroad can also be taxed in the foreign country under certain conditions. In such cases, double taxation could occur. To avoid this, there are various mechanisms, such as double taxation agreements between Germany and the respective country, which are intended to ensure that income is not double-taxed.
Regarding your additional costs during your stay abroad, such as accommodation and meals, it is generally possible to deduct these costs for tax purposes. To do this, you should collect and keep all relevant receipts in order to include these costs in your tax return.
To best prepare for potential tax pitfalls, I recommend that you contact a tax advisor early on who specializes in international tax issues. An expert can analyze your individual situation and provide you with specific recommendations to minimize tax risks and take advantage of potential tax benefits.
I hope that this information has been helpful to you. If you have any further questions or would like more detailed advice, I am happy to assist you.
Best regards,
Dietrich Hohenadel
