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limited tax liability IN germany
What you need to know about limited tax liability in Germany as an individual.
As an individual in Germany - you may be subject to limited tax liability
- if you are a foreign resident
- and earn income from sources within Germany
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KeY POINTS
- Limited tax liability applies to non-residents
Limited tax liability applies to individuals, who are not residents of Germany, but earn income from sources within Germany (such as rental income or employment income). Residents of Germany are generally subject to unlimited tax liability, which means, that they are taxed on their worldwide income.
- Taxable income
Non-residents, who are subject to limited tax liability in Germany, are taxed only on income that is sourced within Germany.
This includes:
- income from employment in Germany
- income from a business or trade carried on in Germany
- income from German real estate
- income from certain investments in Germany.
- Tax rates
The tax rates for limited tax liability in Germany are generally the same as those for unlimited tax liability. However, there are some differences, such as the fact, that non-residents are not eligible for certain deductions and tax benefits.
- Filing requirements
If you are subject to limited tax liability in Germany, you will need to file a tax return in Germany. This is generally done on an annual basis.
The deadline for filing is July 31st of the following year (if your are not represented by a tax advisor) .
- Double taxation
If you are subject to limited tax liability in Germany and also pay taxes on the same income in your home country, you may be eligible for a tax credit or exemption to avoid double taxation. Germany has tax treaties with many countries to prevent double taxation, so it is important to check whether your country of residence has a tax treaty with Germany.
- Penalties
Failure to file a tax return or pay taxes on time can result in penalties and interest charges. It is important to ensure that you comply with all tax requirements to avoid these penalties.
Summarizing, a limited tax liability in Germany can be a complex topic. It is important to seek advice from a tax professional - if you have any questions or concerns.
YOUR EXPERT
Contact us to provide you with expert support
Ms. Lydia Bachmair
DELTAKAP Steuerberatungsgesellschaft GmbH
Tax Specialist (German Tax Law)
Tel. +49 89 4522865 -22 / Ext. -54