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Germany: Can vacations push tax into bracket for global earnings taxation?

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    Germany: Can vacations push tax into bracket for global earnings taxation?

    Hi,
    I have been working in Germany, paying tax in Germany (as a "freelancer"), and will leave after spending approximately 175 days in the country. So I will be paying tax on my services in Germany, but will not achieve the status where I will be taxed on my global income. When I leave I will naturally declare to the tax authorities that I am leaving.

    I will be working for the same client outside Germany, but would like to be able to visit Germany occasionally for social outings with the client (not work related). Does anyone know if these visits could push me into the category where I would be eligible to pay tax on my global income (which normally kicks in after approximately 182 days). My understanding is that the total day count for the purposes of eligibility for taxation in Germany on global income, is based on days spent in the country, and not just days spent working.

    The German client would provide a declaration that I am not working in Germany, and my contract would indicate a different country office where I am based as my normal place of work. I have no ties in Germany.

    Thoughts?
    ‘His body, his mind and his soul are his capital, and his task in life is to invest it favourably to make a profit of himself.’ (Erich Fromm, ‘The Sane Society’, Routledge, 1991, p.138)

    #2
    Originally posted by lecyclist View Post
    Hi,
    I have been working in Germany, paying tax in Germany (as a "freelancer"), and will leave after spending approximately 175 days in the country. So I will be paying tax on my services in Germany, but will not achieve the status where I will be taxed on my global income. When I leave I will naturally declare to the tax authorities that I am leaving.

    I will be working for the same client outside Germany, but would like to be able to visit Germany occasionally for social outings with the client (not work related). Does anyone know if these visits could push me into the category where I would be eligible to pay tax on my global income (which normally kicks in after approximately 182 days). My understanding is that the total day count for the purposes of eligibility for taxation in Germany on global income, is based on days spent in the country, and not just days spent working.

    The German client would provide a declaration that I am not working in Germany, and my contract would indicate a different country office where I am based as my normal place of work. I have no ties in Germany.

    Thoughts?
    Isn't the German tax year the calender year? If so, would you not just have entered into a new year for tax purposes anyway?

    Comment


      #3
      My understanding is that it is based on elapsed time from entry to exiting the country. The formula is different from the UK where you count days towards residency as those spent at midnight (with some ambiguity about transit days). In Germany it is simply date of entry, date of exit. There are lot of traps to watch out for, where (for example) I claim to be exiting Germany, but kept a gym membership running based on a direct debit from a German bank account, then it could be argued by the Finanzmt I am still tied to Germany and therefore eligible to be taxed on my worldwide income. This is similar to the non-residency test in the UK where HMRC may check voter registration details, clubs and society memberships, to prove that a definite break has not taken place from the UK (the "sticky" aspect of residency), meaning tax liability remains against the UK for global income.

      In my case I have no German ties, apartment or bank account, so I am hopeful that vacations in Germany will not be treated as a continuation of my ties to Germany (pushing me into the global tax bracket).
      ‘His body, his mind and his soul are his capital, and his task in life is to invest it favourably to make a profit of himself.’ (Erich Fromm, ‘The Sane Society’, Routledge, 1991, p.138)

      Comment

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