Peter Scheller
Berater für Wirtschaftsprüfer, Rechtsanwälte, Steuer- und Unternehmensberater

„Wenn es knifflig wird.“

German tax residence

von Peter Scheller

German tax residence

Residence is one of the most common criteria for the taxation on income. Most states tax the worldwide income of a person who is a resident within their territory. Unfortunately every state is free to define the term residence differently. The alternative definitions of residence lead to confusion amongst people moving abroad. The situation is aggravated by the fact that some states tax people on the basis of other criteria such as citizenship or domicile. Therefore the term tax residence can have different meanings in different countries.

The vast majority of countries have alternative definitions for tax residence. This is the case for both individuals and corporations and of course this also applies for Germany.

German tax residence of individuals

Germany has two types of tax residence:

  • Place of residence
  • Habitual abode

A person has his/her place of residence where the person has a home which implicates that he/she intends to retain this home and use it (§ 8 General Fiscal code). This home can be of very modest character and it must not be the main residence. The person must have the authority of disposal over this place. It is irrelevant whether he or she owns or rents this place. A hotel room in general does not provide a person the required authority of disposal. However, a hotel may be deemed as a place of residence if a specific hotel room is rented on a long-term basis.

Tax resident in Germany could also be a person who works for a longer period abroad and keeps his home at his/her disposal. This is even the case if the person does not use the home for a longer period and is de-registered with the registry office. If this person rents the place out and cannot use it for the period of rent he/she loses its status as tax residence in Germany.

The second type of tax residence is the habitual abode (§ 9 General Fiscal Code). A person has its habitual abode at a place or an area where this person stays not only on a temporary basis. This is the case if the stay exceeds six months and is not interrupted for a longer period. Short-term breaks abroad do not interrupt the six-month period. However, vacations, health treatments or other private purposes do not lead to a tax residency in Germany if the stay does not exceed one year. This means that a job or business related stay in German hotels for a period of more than six month lead to a tax residency in Germany.

If a person is a tax resident in Germany they are subject to German income tax with their total income wherever it is earned. However, foreign sourced income might not been taxed in Germany if a Double Taxation Convention provides a respective cover.

If a person is not a tax resident in Germany it will only be liable to German income tax with income from German sources defined in § 49 Income Tax Code.

If a person is tax resident in Germany he/she is also liable to German inheritance and gift tax. This applies for a decedent or donor as well as a beneficiary.

German tax residence of corporations

A corporation is tax resident in Germany if it has its statutory seat or its effective management in Germany (§ 1 (2) Corporation Tax Code). This means that a foreign company can be a tax resident in Germany if the management performs its substantially important executive tasks in Germany.

Residence in Double Taxation Conventions

Double taxation conventions define the term of residence in a different way. First of all the person has to have a permanent home. This requires the physical use of the home as a residence. A long-term absence from the house or flat is not considered to be a permanent home. This is a main difference to German tax law.

Secondly there can only be one tax residence in the meaning of a Double Taxation Convention. If a person is considered to be a tax resident in both countries the so called Tie-breaker-rule comes into force. This rule states that a person with two permanent homes is a resident where he/she has their centre of vital interests. A married person with family has this centre of vital interest always where the family lives. In other cases the application of this rule may be tricky.

Example: A husband is living and working in Germany on a long-term contract and his wife lives and works abroad. The couple have no children. Their flats in Germany and elsewhere abroad are of the same size and comfort. In this case the husband might be a tax resident in Germany and his wife abroad.

Corporations are resident at the place of effective management.  However, proper clarification may not be easy.

Example: A Limited company has it statutory seat in Ireland. Its managers reside in Germany, Sweden, Australia and India. The management doesn’t meet on a regular basis. Management decisions will be made in online conferences. In cases like this it may be difficult to figure out where the place of effective management is.

Tax residence in other countries

As mentioned earlier, other countries define the term tax residence in differing ways. The following examples show the wide variety of this term.

For example every US citizen is liable with his or her worldwide income. Even if a US citizen lives abroad for a long period he or she remains tax liable to the Federal Income Tax and other personal taxes. The same applies in the USA for

  • Persons with the status as a Lawful Permanent Resident under the immigration laws (Green Card holder)
  • Persons who pass the Substantial Presence Test

More information:

In the UK a person is liable to British Inheritance Tax if it has its domicile in Great Britain. The term domicile neither corresponds with the term residence nor with nationality. Even if the person lives abroad for years it can be subject to British inheritance tax.

More information:



Residence Wohnort
Home Wohnung
Permanent home Ständige Wohnstätte
Habitual abode Gewöhnlicher Aufenthalt
General Fiscal Code Abgabenordnung
Income Tax Code Einkommensteuergesetz
Corporation Tax Code Körperschaftsteuergesetz
Inheritance and Gift Tax Erbschaft- und Schenkungsteuer
Double Taxation Convention Doppelbesteuerungsabkommen
Centre of Vital Interest Mittelpunkt der Lebensinteressen

Author: Peter Scheller, Steuerberater – Master of International Taxation




Kommentar von mike finlay |

I was very interested in your website article but, I have an unusual situation where I can't determine my Centre of Vital Interest.

• I own a number of businesses in Ireland which I run with my Brother.
• I recently moved to Germany with my wife and baby because my wife was promoted in her company to their German offices.
• We rented out our home in Ireland. I stay with my mother when I return every two weeks
• I don't earn income in Germany.
• I carry out some duties for my Irish companies on line each day
• I return to Ireland for 2 working days every 2 weeks.
• During this time in Ireland I carry out my meetings and main duties and board meetings
• We rent an apartment in Germany.
• My wife pays her taxes in Germany.

Can you help me determine my COVI please?

Kind regards
Mike Finlay

Kommentar von Pablo Daniel |

I would like to get some ideas on how to become a tax resident in Germany.

I am 60 yrs old , born in Argentina but holding double citizenship (Argentina and Germany )-

In the short term I would like to move from Argentina and obtain a tax residence in Germany. Am not aware or familiar on how fast this can be achieved and what are the requirements to obtain it. I suppose I need to get a Wohnsitz first in Germany. Am not sure if I need to ( and how long ) remain within the German territory for an x or minimum amount of time to get this residency,

Would appreciate your insights . Thanks in advance .

Antwort von Peter Scheller

If you take residence (home) or habitual abode in Germany you become tax resident in Germany. If you will be here only on a non-permanent basis ther are not tax implications.

You have to register in Germany's "Einwohnermelderamt" if you take residence in Germany (home). This has nothing to do with the tax office.

What you have to do in regard to the tax office depends on you personell circumstances and your income structure. In the year you move to Germany it is very likely that you have to file a German income tax return. However, that has to be done by the middle of 2020 for the tax year 2019.

Kommentar von Asish Saha |


I need to get a German Tax residency certificate. Would you be able to guide me on the process. Thanks

Antwort von Peter Scheller

Did you register with the "Einwohnermeldeamt"? If so, you get a tax identification number.

Did you file a German income tax return?

If you need professional help you should send an e-mail.

Kommentar von Joe paul |

Hello please tell me what the term habitual residence means in Germany. What are my expectations look in terms of permit to stay thank you very much.

Antwort von Peter Scheller

The article tells you only something about tax residence. This does not having anything to do with permits to stay in Germany.

Kommentar von Rahul Khandelwal |

Greetings! I'm an Indian national, and I moved from Portugal to Germany in Mar 2020. During the same year, my company transferred me from Germany to the Netherlands in Oct 2020. I need Tax Residency Certificate from Germany to avoid double taxation in Portugal and in the Netherlands. I found a form to be filled and submitted with the Finanzamt, but it requires me to fill a physical address (and I am already out of Germany). What is the correct process for me to obtain the Tax Residency Certificate?
Best Regards,

Antwort von Peter Scheller

Did you or your employer paid income tax for you. If no, you may have a problem to get this certificate.

Kommentar von Shrinidhi |


Could you please let me know how to get the tax residence certificate in Germany.

Background:I am working in Germany and I have a tax ID as well.
Now I want to double taxation in my home country for this I need to submit the tax residence certificate from Germany.

Could you specify the link where I can download the form?


Antwort von Peter Scheller

Did you file income tax returns in Germany?

In this case you should ask you tax office.

Kommentar von Deeksha Mysore Ramesh |


Could you please guide me where can I get Tax residency certificate?
I wanted it to avoid double taxation in my home country, and they are requesting the TRC from Germany.

Apparently, I am still not working here in Germany... I am still doing my master's... And so I haven't filed any tax returns...

What are my options in my situation?

Also, if at all tax residency certificate is provided, where and how can i apply or download it from ?

Antwort von Peter Scheller

Speak to the relevant tax office.

Kommentar von Lauren |

Hello, I am a US citizen living in Germany. I am considering starting my own business (sole proprietorship) in the US as a travel agent and serving US clients. I would like to continue living in Germany for the timebeing. Is it possible to have my business in the US and run it from Germany without having to pay double taxes or run into any trouble of this kind? Thank you for your advice.

Antwort von Peter Scheller

This question require a good analysis of your business model and your overall tax situation. It is very likely that you have to pay taxes in Germany. However, you have to make sure that you do not face a double taxation scenario. You should contact an experienced tax adviser.

Kommentar von Peter |

Hi, what happens when someone moves to Germany in the middle of the year and becomes tax resident by the end of that year? Is he considered a german tax resident for the whole calendar year (i.e from 1st of January) or from the date he actually arrived in Germany (i.e from the middle of the year)?

Antwort von Autorenteam

You become tax liable in the moment you are tax resident in Germany (taking a home or habitual abode). Not before that.

Kommentar von Katharina |

Hello, A husband is living and working in Russia as an individual entrepreneur (tax residence in Russia based on 183 calendar days rule in Russia) on a long-term basis and his wife together with their child lives and works in Germany (tax residence in Germany). House in Russia is used by a husband (at the ownership of his wife), appartment in Germany is rented by a wife (rental fee is paid by wife). Husband occasionally visits his wife & child one a month/every two months for a week. Questions: Does he need to be registered at this temporary appartment in Germany? if he is registered at this appartment in Germany, does he become a tax resident in Germany as well with unlimited tax liability or will it be covered by Double taxation Rule? Thank you!

Antwort von Administrator

Registration is not directly linked to the tax residence. This has to be clarified with the "Einwohnermeldeamt".

Whether he has a tax residence in Germany is a different matter (see the article). If the flat in Germany can be considered his home it need to be clarified where is main home is (center of vital interests). In cases like this it is always difficult to determine.

Kommentar von Ken |

My wife and I both own our flat . We both must sign to sell . That being said we could change tax residency because neither of us has control over disposition . Say my wife takes a job in Poland , she does not have right to sole disposition , is she still responsible to pay income tax to Germany ?

Antwort von Administrator

To analyze your tax situation more information is required.

Kommentar von Sanjay |

I am a tax resident in Germany. I have a house in Delhi. No one is using it so no rental income. I do pay monthly maintenance costs in India. If I sell it, am I liable to pay capital gain tax in Germany or India as per India Germany double tax action avoidance treaty? Indian tax consultant told me I have to pay 30 percent tax in India. I only wonder if I have to pay tax in Germany too on capital gains when I sell the house.

Antwort von Administrator

We think not, but you have to check on the provisions of the double taxation treaty Germany/India.

Kommentar von Anna |

Hi, I am a German tax resident and i consider moving to Dubai for work. I would like to stay registered in Germany yet i will permanently rent out the flat. I will spend more than 6 months in Dubai in 2024.

Can i stay registered in Germany and not be considered a tax resident in Germany?


Antwort von Administrator

It all depends on the fact whether you give up your tax resdence.

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