How are taxes handled when expats move to or leave Germany during the year?

Short answer: If you move to or leave Germany during the year, your tax position depends on when your German tax residency begins or ends, which income you receive, and whether a double taxation agreement applies.

When you move to Germany: German tax residency (steuerliche Ansässigkeit) generally begins when you establish a home or your main place of living in Germany. From that point, you may need to declare your worldwide income in a German tax return.

Income earned before arrival: Salary or other foreign income earned before moving to Germany is not automatically taxed again in Germany. However, it may still need to be reported and can affect the tax rate applied to your German income through the progression clause (Progressionsvorbehalt).

When you leave Germany: Your German tax residency may end after you give up your home and main place of living in Germany. Deregistration (Abmeldung) is important, but it does not automatically end your tax residency if you still keep a home available in Germany.

Income earned after departure: You may still have limited German tax liability (beschränkte Steuerpflicht) if you continue receiving German-source income, such as rental income from a German property. A double taxation agreement (Doppelbesteuerungsabkommen) determines which country may tax other types of income.

In the year you arrive or leave, you will normally file one German tax return covering the relevant periods. Keep documents showing your moving date, registration or deregistration, foreign income, German payslips, taxes paid abroad and proof of residence.

Key takeaways:

• Moving during the year can create part-year German tax residency.
• Foreign income may affect your German tax rate through the Progressionsvorbehalt.
• German-source income can remain taxable after you leave Germany.
• Registration, deregistration and income documents are important for the Finanzamt.