German Tax Knowledge · §§ 8, 9 AO · § 1 EStG
Leaving Germany and Ending German Tax Residence
Moving abroad does not automatically end unlimited German income tax liability. The decisive question is whether German residence under § 8 AO has actually been terminated and whether any habitual abode under § 9 AO has ended. Only then does the German tax position generally shift from unlimited tax liability to possible limited tax liability.
Tax Departure from Germany
The Actual Facts Matter – Not Registration Formalities Alone
Unlimited German income tax liability under § 1(1) EStG generally continues for as long as an individual has a residence or habitual abode in Germany. Moving abroad therefore ends unlimited tax liability only once the German domestic connecting factors have actually ceased to exist.
For residence under § 8 AO, the key question is whether a dwelling is still held under circumstances indicating that it will be retained and used. For habitual abode under § 9 AO, the individual’s actual pattern of presence is decisive.
Deregistering from the local registration office, signing a foreign lease or establishing a foreign residence can be important evidence. None of these steps, however, replaces the tax-law analysis.
§ 8 AO
When Is German Tax Residence Actually Terminated?
Ending residence is the counterpart to establishing it: the individual must cease to have actual control over the dwelling or cease to retain it for personal residential use.
Dwelling Fully Given Up
A rented apartment that has been terminated, vacated and handed back so that the individual can no longer use it generally provides strong evidence that residence has ended.
Property Rented to a Third Party
If an owned property is rented on terms that prevent the owner from using it during the lease period, this generally weighs against continued possession of the property as the owner’s own residence.
Dwelling Remains Available
If a dwelling remains available at any time or on a recurring basis for personal stays, German residence may continue even where most of the year is spent abroad.
Family Home Remains in Germany
If the family remains in a German dwelling that is still accessible to the taxpayer, the risk of continued German residence is particularly high. Actual availability and use remain decisive.
Room at Parents’ or Relatives’ Home
A mere opportunity to visit is insufficient. However, accommodation genuinely kept available for the individual’s own residential use can, depending on the facts, still constitute a German residence.
Holiday and Visiting Stays
Short visits alone do not necessarily create or preserve residence. Repeated use of a dwelling that remains continuously available for personal use can lead to a different result.
No Day-Count Test
There Is No Fixed Number of Permitted Days in Germany
§ 8 AO contains no statutory minimum or maximum number of days for German residence. Even a dwelling used only irregularly can establish or preserve residence if it is objectively available as the individual’s own accommodation and is used accordingly.
The frequently cited 183-day rule is therefore not a test for terminating German residence. It may be relevant in other tax contexts, particularly treaty provisions or habitual-abode questions, but it does not replace the analysis under § 8 AO.
- no 183-day rule for § 8 AO
- no minimum number of annual overnight stays
- multiple residences can exist simultaneously
- center of vital interests is not required under § 8 AO
- actual availability and residential use are decisive
§ 9 AO
Any Habitual Abode Must Also Have Ended
Residence Ends but Presence Continues
Even without a dwelling, unlimited German tax liability can continue if the individual still has a habitual abode in Germany. § 9 AO focuses on actual presence and its duration and character.
Living Abroad
With a genuine long-term move abroad, the center of actual physical presence will normally shift abroad as well. Transitional periods, frequent returns or substantial periods in Germany must nevertheless be examined separately.
Documentation
Facts That Help Demonstrate an Actual Termination of German Residence
Lease Termination & Handover
Notice of termination, a handover protocol and return of keys can document that control over the former dwelling has ended.
Sale or Third-Party Rental
A sale agreement or long-term lease can demonstrate that an owned property is no longer available for the individual’s personal residential use.
Moving the Household
Moving invoices, household-shipment records and the relocation of personal belongings can support the factual abandonment of the German home.
New Home Abroad
A foreign lease or purchase agreement supports the establishment of a new home abroad, but does not by itself eliminate a German residence that continues to exist.
Deregistration
Deregistration is useful evidence and should normally correspond with the actual departure date. It is not, however, determinative for German tax purposes.
Travel and Presence Records
Calendars, tickets and other records may be important during transition periods to establish when actual presence in Germany ended.
Consequences of Departure
What Happens After Unlimited Tax Liability Ends?
End of Worldwide Income Taxation
Once unlimited tax liability ends, Germany’s taxation of worldwide income under § 1(1) EStG generally ends as well.
Limited Tax Liability May Continue
German-source income within § 49 EStG may remain taxable in Germany, including German real estate, certain employment income, permanent establishments and certain pensions.
Year of Departure
In the year of departure, the periods before and after the end of unlimited tax liability must be separated carefully. Foreign income earned outside the period of unlimited tax liability can still be relevant for progression purposes in certain cases.
Treaty & Residence
Domestic Residence and Treaty Residence Are Separate Questions
A double tax treaty does not determine whether German residence exists under § 8 AO. The domestic tax status is analyzed first. If connecting factors remain in both countries after the move, treaty residence may then have to be determined under the applicable tie-breaker rules.
Domestic Law First
Germany first determines residence, habitual abode and tax liability under the AO and EStG.
Treaties Allocate Taxing Rights
An applicable treaty may then determine which country is the treaty residence state and which categories of income Germany may continue to tax.
Foreign Tax Act
Ending German Residence Can Trigger Additional Exit-Tax Consequences
The end of unlimited German tax liability is not always the end of German taxation. Depending on the taxpayer’s personal and economic circumstances, §§ 2 and 6 AStG in particular may need to be examined.
§ 6 AStG – Exit Tax
Where an individual holds a qualifying shareholding within the meaning of § 17 EStG, ending unlimited tax liability through the termination of residence or habitual abode may be treated as a disposal at fair market value. This can bring previously unrealized gains into taxation.
§ 6 AStG§ 2 AStG – Extended Limited Tax Liability
For certain German nationals who move to a low-tax jurisdiction after a period of German tax residence and retain substantial economic interests in Germany, German taxation can extend beyond the normal scope of § 49 EStG.
§ 2 AStGBFH Case Law
Important Decisions on Ending Residence and Moving Abroad
The case law shows in particular that German residence is determined from objective facts and that a long-term stay abroad does not by itself eliminate an existing German residence.
No Minimum Period of Presence Is Required
A German residence does not require a minimum number of days or weeks of physical presence. The decisive question is whether the dwelling is objectively retained for the individual’s own residential use.
Practical significance for departure: A small number of days spent in Germany does not automatically eliminate a residence that still factually exists.
Reported at BFHE 182, 296; BStBl II 1997, 447.
The Accommodation Must Actually Have Residential Character
A dwelling must genuinely be available to the taxpayer as his or her own accommodation. Mere visits, short holiday stays or use only for administrative purposes are not sufficient.
Practical significance for departure: Continued access to rooms in Germany does not automatically preserve a German residence.
BFH decisionVisits or Own Residence?
The BFH distinguishes between accommodation genuinely maintained as the taxpayer’s own home and mere visits. Actual availability and use are decisive.
Practical significance for departure: A room at a relative’s home is not automatically a German residence; the precise factual arrangement matters.
BFH decisionA Multi-Year Foreign Assignment Does Not Necessarily End Residence
A German residence can continue even during a multi-year foreign assignment. No minimum number of days in Germany is required, and irregular stays can be sufficient.
Practical significance for departure: The length of the stay abroad is not decisive; the key question is whether the German dwelling continues to be retained as the individual’s own accommodation.
BFH decisionPre-Departure Review
Key Questions in Practice
Will German Accommodation Remain Available?
After the move, can the individual still use a dwelling or other accommodation in Germany at any time or on a recurring basis?
How Will the Dwelling Be Used?
Will future stays be mere visits, or will the accommodation continue to have genuine residential character?
When Does Control End?
What specific date can be documented as the termination of residence based on handover, rental, sale or other facts?
Will German-Source Income Remain?
Real estate, workdays, permanent establishments, shareholdings or pensions may continue to create German tax consequences after departure.
Does a Treaty Apply?
Where substantial connections to Germany remain, treaty residence and allocation of taxing rights may need to be analyzed.
Does the AStG Apply?
Qualifying shareholdings under § 17 EStG and moves to low-tax jurisdictions should be reviewed before departure.
Further Reading
Related Topics
Frequently Asked Questions
Leaving Germany and Ending German Residence
Does deregistering from the local registration office end my German tax residence?
Do I have to sell my German property to end residence?
How many days may I spend in Germany after moving abroad?
When does unlimited German tax liability end?
Do I still have to file a German tax return after moving abroad?
Does every departure from Germany trigger exit tax?
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