German Income Tax Calculator
Is Foreign Income Taxed in Germany?
If you live and work in Germany you are usually taxable in Germany on your foreign income worldwide. All your income needs to be reported to the German authorities. If you have income outside of Germany the Double Taxation Treaty between Germany and the country where your income comes from will tell you which of the two countries involved has the right to levy taxes. The answer varies depending on the type of income you have and which country is involved. The analysis can be a bit complex, but here are our most common cases to illustrate the concept if you are tax resident in Germany:
- Foreign investment income is typically all taxed in the country of tax residency: in Germany
- Foreign rental income is typically all taxed in the country where the property is located: outside of Germany
- Freelance income from foreign sources is typically all taxed in the country of tax residency of the freelancer: in Germany
Is Income Paid to a Foreign Bank Account Taxed in Germany?
It is completely irrelevant for German tax purposes where or in which currency you receive your income. As long as you are tax resident in Germany you are taxable on your worldwide income in Germany. Literally anything you receive (in any shape or form) in exchange for your services is relevant for tax purposes.
What if I Bring my Income from Abroad into the Country?
For tax purposes it makes no difference if you keep your income abroad or you bring it into Germany. This is simply seen as the movement of funds which is not a relevant aspect for German income tax purposes. The movement of funds does not trigger German income tax.
Contact us to find out, how we can prepare an optimized German tax return for you as an expat.
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