For tax purposes, nationality is only a relevant factor in very rare cases. Many tax benefits available to German nationals are equally available to EU nationals, but not in all cases to non-EU nationals. There is no specific “Expat Tax Status” in Germany like you find in some other jurisdictions. In other words: As an expat you do not qualify for particular tax incentives designed to attract you to move to Germany. Having said that, you will certainly qualify for a number of benefits which are equally available to any German citizen who is in the same situation like yourself as an expat. Your tax status is typically linked to your tax residency. You take up tax residency in Germany in two different and independent ways:
- You move to the country and set up a home with the intention of staying for more than 6 months. A home for this purpose is any form of accommodation suitable to live in permanently. It does not have to be a palace, it does not have to be your own property. A small rented place with a kitchen and a bathroom is enough to make you tax resident. It is important to know that such a home makes you tax resident even if you don’t use it. It is enough, if such a place is available to you. Available means, that you can walk in and out and stay whenever you want.
- Without a home in the country you can become tax resident by staying in the country for more than 6 months. This would be the case if you stayed in a hotel and did not have your own home in the country.
It is not unusual to be tax resident in more than one country. Lets say you live in the UK together with your family, you have your home there and your kids go to school there. Obviously you are tax resident in the UK. You then take up a job in Germany, fly over for the week and go back to the UK for the weekend. You rent a small apartment in Germany and you are tax resident in Germany as well. So, you are dual tax resident. Is this a problem? No. This is why most countries have Double Tax Treaties and these Treaties resolve the potential conflicts arising in such situations.