Situation
Moving from Switzerland to Germany · Part-year tax liability · Progression provisoYour tax return for the year you move from Switzerland to Germany
If you move from Switzerland to Germany during a calendar year, the year must be divided into separate periods for tax purposes. The key issues are the start of unlimited German income tax liability, residence under the double taxation agreement, the treatment of Swiss income before and after the move, and the progression proviso for foreign income from the period before you moved to Germany.
Start of tax liability
The arrival date divides the tax year into two periods
Unlimited German income tax liability generally begins as soon as you establish a residence or habitual abode in Germany within the meaning of German tax law.
Registration with the local residents’ registration office is an important indicator, but is not decisive on its own. The actual circumstances determine the position: in particular, the availability of a home and when you actually establish your stay in Germany.
The first step for the year of arrival is therefore to determine the exact date from which Germany treats the taxpayer as subject to unlimited tax liability under domestic law.
The move date and the registration date may differ
For income tax purposes, the relevant question is not simply when you registered with the local residents’ registration office, but when you actually established a residence or habitual abode in Germany.
How the year of arrival is treated
Assess the periods before and after the move, and treaty issues, separately
The year of arrival is not an ordinary full year of German tax residence. Foreign income before the move and worldwide income after unlimited German tax liability begins serve different purposes in the tax assessment.
- The period before unlimited German tax liability begins
- The period from the start of unlimited German tax liability
- Treaty residence where a permanent home is retained in Switzerland
- The progression proviso for foreign income earned before the move
- Ongoing treaty treatment after the move
Before the move
Swiss income before the move cannot simply be disregarded
Income earned in Switzerland before unlimited German tax liability begins is generally not subject to German income tax solely because you subsequently move to Germany during the same calendar year.
However, it may be relevant to the progression proviso under section 32b(1), first sentence, no. 2 of the German Income Tax Act (EStG). This means that it can affect the tax rate applied to income that is taxable in Germany.
Swiss employment income
Employment income from the period before the move may affect the German tax rate in the year of arrival.
Swiss investment income
Investment income before the move requires a separate assessment of its relevance to German tax progression and the applicable tax rate regime.
Swiss property
Property income before the move must be assessed separately in terms of tax liability, treaty treatment and its effect on the tax rate.
After the move
Germany generally takes worldwide income into account from the date of arrival
Once unlimited German income tax liability begins, any Swiss income you continue to earn generally also needs to be assessed for German tax purposes.
Whether Germany actually taxes that income then depends on the type of income and the Germany–Switzerland double taxation agreement. The treaty may result in German taxation with a foreign tax credit, exemption with progression, or a specific limit on withholding tax.
Employment income
Establish where the work is performed, frontier worker status, homeworking arrangements and the allocation of working days.
Investments
Review Swiss securities accounts, dividends, interest and Swiss withholding tax.
Property
Assess Swiss rental income, property sales and German treaty treatment separately.
Pension benefits
Classify occupational pension benefits, AHV pensions and other Swiss pension benefits according to their specific nature.
Progression proviso
The key special rule in the year of arrival
Where unlimited tax liability applies for only part of the year, section 32b EStG covers foreign income that was not subject to German income tax during the rest of the calendar year.
A typical example: a person works in Switzerland from January to August, moves to Germany in September and then earns income in Germany or continues to earn income across the border. The Swiss employment income from January to August may affect the German tax rate for September to December.
Arrival date
Determine when unlimited German tax liability begins.
Income before the move
Identify Swiss income from the earlier part of the calendar year.
Income taxable in Germany
Calculate taxable income from the date of arrival under German rules.
Tax rate
Take Swiss income subject to the progression proviso into account when calculating the tax rate.
Further guidance on the progression proviso
Types of income
Different types of Swiss income require different treatment in the year of arrival
| Type of income | Before the move | After the move | Additional points to check |
|---|---|---|---|
| Employment income | Check the progression proviso | Review Articles 15 / 15a of the treaty and the allocation of working days | Frontier worker status, homeworking, Swiss withholding tax |
| Dividends / interest | Check the relevant period and tax rate treatment | Review German taxation and Swiss withholding tax | Swiss withholding tax, refunds, Anlage KAP |
| Swiss property | Assess the period before the move separately | Check German treaty treatment of ongoing income | Rental income, sales, section 2a EStG |
| Occupational pension / pension income | Establish the payment and the relevant period | Check German taxation according to the type of benefit | Lump sum versus pension payments, withholding tax |
| Shareholdings | Generally outside the scope of unlimited German tax liability until the move | Review dividends, disposals and rules on shareholdings | Section 17 EStG, German Foreign Tax Act (AStG), management in Germany |
German tax return
Which tax return schedules are typically relevant in the year of arrival?
The exact forms required depend on the types of income. For Swiss income, Anlage AUS often only supplements the schedules for the relevant income categories.
Anlage AUS
For certain foreign income, treaty exemptions, foreign taxes and information relevant to the progression proviso.
N / N-AUS
For employment income, work performed abroad, working days and exempt employment income.
KAP
For Swiss dividends, interest and other investment income after German tax liability begins.
Rental income
For Swiss rental properties, using the German rules for calculating income.
R-AUS / pension schedules
For Swiss pensions and certain foreign retirement benefits.
Other schedules
Depending on the circumstances, SO, G or S schedules, or information on shareholdings, may also be required.
Anlage AUS is not a catch-all form for every type of Swiss income
For more detailed guidance on reporting, see Anlage AUS for income from Switzerland .
Treaty residence
Retaining a home in Switzerland can complicate the move
If you establish a residence in Germany while retaining a permanent home in Switzerland, you may be resident in both countries under their domestic laws.
It is then necessary to determine where you are resident for treaty purposes. Relevant factors may include your permanent home, centre of vital interests, habitual abode and nationality.
The treaty tie-breaker does not replace the German residence assessment
A person may already be subject to unlimited tax liability under German law, even though they are still treated as resident in Switzerland for treaty purposes. These two levels must be assessed separately.
Checklist
Documents for your tax return in the year of arrival
The move
Tenancy agreement, property handover, registration and actual move-in date.
Swiss tax documents
Tax return, tax assessment, salary certificate and withholding tax statements.
Investments
Annual securities account statements, dividends, interest and Swiss withholding tax.
Pension arrangements
Occupational pension, vested benefits account, pillar 3a and pension payment documents.
Employment income
Employment contract, working-day calendar, homeworking records and business trips.
Property
Tenancy agreements, receipts, expenses and Swiss tax values.
Shareholdings
Company documents, ownership percentages, dividends and acquisition costs.
Timeline for the year
Keep clear records of stays in Germany, Switzerland and other countries.
Common mistakes
Frequent errors in tax returns for the year of arrival
Treating the whole year as a year of German tax residence
Failing to distinguish the period before unlimited German tax liability begins.
Omitting income before the move
Overlooking Swiss income earned before the move when applying the progression proviso.
Copying Swiss tax figures
Failing to calculate income in accordance with German tax rules.
Failing to assess treaty residence
Disregarding a permanent home retained in Switzerland and the centre of vital interests.
Allocating investment income to the wrong period
Failing to assign Swiss dividends or interest to the correct period.
Treating all occupational pension benefits alike
Failing to distinguish lump sums, pension payments and the specific type of pension arrangement.
Overlooking withholding tax
Failing to check whether Swiss tax deductions qualify for a refund or a German tax credit.
Letting the forms determine the tax treatment
Deriving the substantive tax treatment from ELSTER rather than from the legislation and treaty.
Frequently asked questions
Tax returns in the year of moving from Switzerland to Germany
When do I become subject to unlimited German tax liability after moving?
Do I have to report Swiss income earned before the move in Germany?
Is my Swiss income from before the move taxed in Germany?
How is Swiss employment income treated after the move?
Do I have to report my Swiss securities account in Germany after moving?
How are Swiss occupational pension benefits treated?
Can I be resident in Germany and Switzerland at the same time?
Which forms do I need?
Further tax insights
Understanding the tax implications of moving from Switzerland
Switzerland–Germany tax advice
Have you moved from Switzerland to Germany this year?
We review the start of German tax liability, Swiss income before and after the move, treaty residence, the progression proviso, withholding taxes and your complete German tax return for the transition year.
Get advice on your year of arrival