What are the tax obligations for expats living in Germany?

If you live in Germany or have your habitual abode there, you are subject to unbeschränkte Steuerpflicht (unlimited tax liability). This means Germany taxes your worldwide income from all sources, not just income earned in Germany. You must declare foreign salary, foreign rental income, foreign dividends, and foreign capital gains on your German tax return.

Double taxation is addressed through Germany's network of double tax agreements (Doppelbesteuerungsabkommen, DBA) with over 90 countries. Depending on the treaty, foreign income may either be exempt in Germany (with a progression proviso that still affects your tax rate on German income) or taxed in Germany with a credit for foreign tax paid.

Expats arriving in Germany mid-year are taxed only from the date of arrival. Expats leaving mid-year are taxed only until the date of departure. Moving to Germany triggers a German tax identification number (Steueridentifikationsnummer) automatically once you register your address at the Bürgeramt within 14 days of arrival, which is a legal requirement.

Expats employed by a German company have Lohnsteuer withheld from salary automatically. Those working for a foreign employer while living in Germany must make quarterly advance tax payments (Vorauszahlungen) to the Finanzamt.