Germany–Switzerland · Leaving Germany
Section 1 EStG · Sections 8 and 9 AO · Article 4 DTAWhen does unlimited German tax liability end when moving to Switzerland?
Unlimited German income tax liability does not end simply because you deregister or move into a home in Switzerland. The decisive question is whether you still have a residence within the meaning of section 8 or a habitual abode within the meaning of section 9 of the German Fiscal Code (AO) in Germany. Any residence established in Switzerland must initially be assessed separately.
Basic rule
Either a residence or a habitual abode is sufficient for unlimited tax liability
Under section 1(1) of the German Income Tax Act (EStG), individuals are subject to unlimited income tax liability in Germany if they have a residence or habitual abode there.
Establishing a new residence in Switzerland is therefore not sufficient on its own to end German residence-based tax liability. The relevant German connection must actually cease to exist.
Unlimited income tax liability under section 1(1) EStG generally ends only when the individual no longer has either a residence or a habitual abode in Germany.
Registration in Switzerland does not automatically end German tax liability.
Connections giving rise to tax liability in Germany and Switzerland may coexist for a period. Whether Germany continues to impose unlimited tax liability under its domestic law is initially determined solely by German tax law.
Section 8 AO
When does a German residence continue to exist for tax purposes?
A residence for tax purposes exists wherever a person maintains a dwelling in circumstances indicating that they will retain and use it.
Your own home
If a home in Germany remains available for your personal residential use, a German residence may continue to exist.
Use is decisive
Ownership, a tenancy agreement or registration status is not decisive on its own. What matters is actual control over the home and the circumstances of its use.
A Swiss home is not enough
A person can have a residence for tax purposes in Germany and a residence in Switzerland at the same time.
A rarely used home is not automatically irrelevant for tax purposes.
The number of nights spent there is not the only consideration. In particular, it is necessary to assess whether the home remains actually available for personal residential use and continues to form part of the individual’s living arrangements.
Common housing situations
Which housing arrangements indicate that residence has ended or continues?
| Situation | Typical significance | Points to review |
|---|---|---|
| The tenancy is terminated and the home is fully handed back | Strong evidence that the German residence has been given up. | Document the handover date and actual moving-out date. |
| An owned apartment is sold | The property will generally no longer constitute a residence. | Consider the actual handover and when personal use ends. |
| The home remains vacant and available at any time | Significant risk that residence continues. | Assess actual availability and the intention to use the home. |
| The home is let to a third party on a long-term basis | May indicate that the owner no longer has the home at their disposal. | Review the contractual terms and actual ability to access and use it. |
| A room remains available in the family home | Depends on the individual circumstances; may be relevant for tax purposes. | Examine personal control over the accommodation and actual use. |
| Hotel stays or short-term accommodation during visits | Generally a weaker indication of a residence. | Assess permanence and personal control over the accommodation. |
Section 9 AO
A habitual abode in Germany may continue even without a home
Giving up all homes in Germany does not necessarily end unlimited tax liability if a habitual abode continues to exist in Germany.
Under section 9 AO, a habitual abode exists where a person stays in circumstances indicating that their presence is more than temporary.
A continuous stay of more than six months is generally treated as a habitual abode from the beginning of the stay; short interruptions are disregarded.
Section 8 AO
The decisive factor is a dwelling that is retained and used in the relevant circumstances.
Section 9 AO
The decisive factors are the actual duration and pattern of stays, even if the individual does not have a home of their own.
Timing
The decisive date is when the last German residence or habitual abode ceases to exist
Unlimited tax liability can end during a calendar year. The entire calendar year is therefore not simply treated as either a “German” or a “Swiss” year for tax purposes.
Moving out
Record the actual date on which you move out of your previous German home.
Availability ends
Document termination of the tenancy, handover, sale or any other event ending your control over the home.
Review your stays
Ensure that no habitual abode continues to exist in Germany.
Subsequent period
Review any remaining German income for limited tax liability and the allocation of taxing rights under the treaty.
Article 4 of the Germany–Switzerland DTA
Unlimited tax liability and treaty residence are different concepts
If a person retains a residence in Germany and also becomes tax resident in Switzerland, they may fall within the scope of taxation in both countries under their respective domestic laws.
For the purposes of the double taxation agreement (DTA), it is then necessary to determine in which contracting state the person is treated as resident.
- Permanent home
- Centre of vital interests
- Habitual abode
- Nationality
- Mutual agreement procedure, where necessary
Swiss treaty residence does not eliminate a German residence under section 8 AO.
The DTA allocates taxing rights between the contracting states. It does not, however, determine whether a residence continues to exist under German domestic law.
Example
Moving to Zurich while a home remains in Germany
The German home is given up
The German rented home is completely vacated, the tenancy is terminated and the property is handed back. The individual moves permanently into a home in Zurich and subsequently stays in Germany only temporarily. Unlimited German tax liability may then end when the last German residence or habitual abode ceases to exist.
The German home remains available
The individual rents a home in Zurich but keeps their previous German home furnished and available for use at any time. A German residence under section 8 AO may therefore continue despite the Swiss residence. Treaty residence must then also be determined.
Documentation
Documents that demonstrate the actual departure
Termination or sale
Notice of termination, end of the tenancy, purchase agreement or other evidence that the home has been given up.
Handover record
Date on which the keys are handed over and actual control over the property ends.
New living arrangements
Swiss rental or purchase agreement, registration and actual moving-in date.
Travel dates
If you frequently stay in Germany, a calendar recording the days spent there may be useful.
Personal circumstances
The family’s move, schooling, professional activities and other actual living circumstances.
Record the relevant date
The departure date used for tax purposes should be documented consistently with the supporting factual records.
Common mistakes
Common misunderstandings about the end of German tax liability
Deregistration = end of tax residence
Incorrectly treating deregistration with the local authorities as equivalent to giving up residence for tax purposes.
Assuming a Swiss residence is sufficient
Establishing a residence in Switzerland does not automatically eliminate an existing German residence.
Keeping a home available at any time
Retaining a German home while assuming that German residence has been fully given up for tax purposes.
Confusing treaty rules with domestic law
Incorrectly treating Swiss treaty residence as ending unlimited German tax liability.
Ignoring days spent in Germany
Failing to assess whether a habitual abode remains in Germany despite giving up the home.
Overlooking continuing tax liability
Failing to review remaining German income for limited tax liability after unlimited tax liability has ended.
After unlimited tax liability ends
The end of unlimited tax liability does not end all German taxation
Individuals who have neither a residence nor a habitual abode in Germany may remain subject to limited income tax liability under section 1(4) EStG if they receive German-source income within the meaning of section 49 EStG.
German rental income
Income from German real estate may remain taxable in Germany after departure.
German income sources
Connections involving companies, work and business activities must be reviewed separately.
Year of relocation
The period of unlimited tax liability and any subsequent period of limited tax liability must be clearly distinguished in the year of departure.
Further reading
Further questions when moving to Switzerland
Germany–Switzerland tax advice
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