Ask a tax advisor on the topic of Severance pay

Payment of the severance payment when moving residence from Germany to Austria

November 17, 2015 | 40,00 EUR | answered by Tobias Heinrich

Dear Sir or Madam,

I am currently living in Germany with my family. Several months ago, I reached a settlement with my employer in court after 30 years of service. I have been receiving my salary as usual. The question now is when and whether I should receive my severance payment. Should I receive it this year in Germany, or wait until next year when I will be living in Austria and starting my new job there?

Due to my current salary in 2015, a tax rate of 44% including solidarity tax would be applied to the severance payment in Germany. If I wait to receive the payment in January 2016 (when my family and I will already be living in Vienna) and have no further income in Germany, the tax rate would be only 24%.

What tax risks do you see with receiving the payment next year?

Thank you for your assistance.
Sincerely,
D.S.

Tobias Heinrich

Dear questioner,

In the context of an initial consultation and your fee investment, taking into account the regulations of this forum, I would like to answer your question.

If you and your wife are indeed only subject to limited tax liability for the year 2016, I do not see any risk from the perspective of German income tax. Of course, currently unknown facts (additional income in Germany, etc.) could influence this statement.

I cannot make a statement regarding the tax situation in Austria.

I hope this answer is satisfactory for your question.

Kind regards,
Tobias Heinrich