Moving to Germany: how your taxes change

You become fully taxable in Germany from the day you have a home here, or once you have stayed more than six months in a row, whether or not you have registered. From then on Germany taxes your income worldwide, and a tax treaty decides which country has the last word on income from abroad. In the year you arrive, Germany taxes only what you earn after the move, but what you earned abroad before it still raises the rate. The tax ID comes by post a few weeks after you register your address.

1. When you become tax resident

German income tax has two levels. If you have a home (Wohnsitz) or your habitual abode (gewöhnlicher Aufenthalt) in Germany, you are fully taxable (unbeschränkt steuerpflichtig) on your income from everywhere (§ 1(1) EStG). Otherwise Germany taxes only income from Germany. Either test is enough on its own.

• A home is a flat or house you have under circumstances that show you will keep it and use it (§ 8 AO). A rented flat you move into for the long term counts from the day you move in. You don't have to own it, and you don't have to have been here six months.
• Habitual abode is where you stay other than just temporarily. A stay in Germany of more than six months in a row always counts, from the first day, and short trips away do not break it (§ 9 AO). The exception is a stay purely for visits, holidays, a cure or similar private reasons that lasts no longer than a year.

Registering your address (Anmeldung) is a separate duty, due within two weeks of moving in (§ 17(1) BMG). It is good evidence of when you arrived, but it is not the tax test. Someone who rents a flat and starts work in March without registering is still resident from March.

You can be resident in two countries at once, for example if you keep your old flat abroad. German law doesn't stop that from happening. A tax treaty settles it (section 4).

2. The year you arrive

Income tax is assessed per calendar year. In the year you arrive you file one return for the whole year, after it ends (§ 25(1) EStG). What that return taxes:

• From the day you became resident: your income from everywhere, subject to any treaty.
• Before that: only income from Germany, if you had any. It is folded into the same return (§ 2(7) EStG).

Your foreign income from the months before the move is not taxed in Germany. It does count, though, when the rate on your German income is worked out. This is the progression clause (Progressionsvorbehalt) (§ 32b(1) no. 2 EStG). Germany works out what rate you would pay if all of it had been taxed here, then applies that rate to the German part only. Foreign income that a treaty exempts is treated the same way (§ 32b(1) no. 3 EStG).

The basic allowance (Grundfreibetrag), the slice of income taxed at zero, is €12,096 for 2025 and €12,348 for 2026 (§ 32a EStG). Arriving mid-year doesn't shrink it, but the progression clause takes back much of the benefit.

Foreign income under the progression clause also makes the return compulsory for employees once it passes €410 in the year (§ 46(2) no. 1 EStG). So most people who arrive mid-year with a salary from abroad behind them have to file for that first year, even if a German employer withheld wage tax every month.

3. The tax ID, and why your employer needs it

You do not apply for the tax ID (steuerliche Identifikationsnummer, or Steuer-ID). When you first register an address in Germany, the registration office sends your details to the Federal Central Tax Office (Bundeszentralamt für Steuern, BZSt), which posts the number to your registered address. It usually takes a few weeks.

• If nothing has come after three months, you can send the BZSt your personal details and it will chase the registration office and send the number. In urgent cases your Finanzamt can tell you the number in person.
• Lost it? Request it again through the BZSt's online form or by letter. For data protection reasons it is sent only by post, never by phone.
• It's yours for life. You only ever get one, and it doesn't change when you move (§ 139b AO).

Your employer needs the ID and your date of birth to fetch your wage tax details. If you don't give them and it's your fault, wage tax is taken in class VI, which has no allowances at all. If the delay isn't your fault, for example because the letter hasn't arrived yet, the employer may use your expected class for up to three months, then correct it (§ 39c(1) EStG).

The tax ID is not the same as a tax number (Steuernummer). The Finanzamt gives you a tax number if you are self-employed or file returns. The guide to tax number and tax ID explains which one goes where.

4. Double tax treaties, in general terms

A double tax treaty (Doppelbesteuerungsabkommen, DBA) doesn't create a tax and doesn't remove your German residence. It divides taxing rights between two countries so the same income isn't fully taxed by both. Germany publishes its list every January. The list as of 1 January 2026 includes treaties with the United States, the United Kingdom, Canada, Australia, India, Ireland, New Zealand and South Africa, among many others. Some countries have none: Brazil has no income tax treaty with Germany, and the treaty with the United Arab Emirates ended on 31 December 2021 (BMF, 7 January 2026).

A treaty does three things that matter when you move:

• It breaks a tie. If both countries treat you as resident, the treaty picks one. Germany's model treaty looks first at where you have a permanent home, then where your personal and economic ties are closer, then where you habitually stay, then your nationality (Article 4). The treaty with your country may word it differently.
• It allocates each kind of income. Salary can usually be taxed where the work is done, rent where the property is, and dividends where you live, with a capped withholding tax in the country the company is in.
• It removes the double tax. Either Germany exempts the foreign income, usually still counting it for the rate (section 2), or it taxes the income and credits the foreign tax against the German tax.

Each treaty is different, and the detail decides real cases: which article applies, what counts as a permanent home, how a pension is treated. It is the part of a move where advice on the treaty for your own country matters most.

5. Your first German tax return

If your only income is a German salary with wage tax withheld, a return is often voluntary. Common reasons it becomes compulsory (§ 46(2) EStG):

• more than €410 of other income, or of foreign income under the progression clause (section 2);
• salary from more than one employer at the same time;
• a married couple using tax classes III and V, or IV with a factor (section 6);
• capital income on which no German tax was withheld, such as interest or dividends paid into an account abroad (§ 32d(3) EStG).

Without a salary, for example as a freelancer, you have to file once your income passes the basic allowance (§ 56 EStDV), and the Finanzamt will expect a return every year once you are registered.

A compulsory return is due by 31 July of the following year, for example 2 August 2027 for 2026, because 31 July 2027 is a Saturday. If a Steuerberater prepares it, the deadline moves to the end of February of the year after that (§ 149(2) and (3) AO; § 108(3) AO). A voluntary return can be filed up to four years after the end of the year (§ 169(2) AO). The tax return deadline guide has the dates for each year.

Returns are filed online through ELSTER, the tax authorities' portal. Registering takes a few days: an activation ID arrives by email, and an activation code comes by post to the address the registration office holds for you (ELSTER help). So it is easiest once your Anmeldung and tax ID are through.

6. Tax classes for employees, in outline

The tax class (Steuerklasse) only decides how much wage tax your employer withholds each month. Your actual tax for the year is set by the assessment, so a class that withholds too little can mean a bill later, and one that withholds too much a refund (§ 38b EStG).

• I: single, or married where class III/IV conditions aren't met.
• II: single parents entitled to the single-parent allowance.
• III and V: a married couple, on joint application. The higher earner takes III, the other V.
• IV: each spouse in a married couple. Couples get IV each automatically when they marry, and IV can also carry a factor that spreads the withholding more accurately.
• VI: a second job alongside the first, or a missing tax ID (section 3).

The point that catches people who move: classes III, IV and V need both spouses to be fully taxable in Germany. If your spouse still lives abroad, you are generally in class I. EU and EEA nationals whose spouse lives in another EU or EEA country can be an exception (§ 38b(1) EStG, last sentence).

The religion you give at Anmeldung is passed on and stored with your wage tax details (§ 39e(2) EStG). If you belong to a church that levies church tax (Kirchensteuer), your employer deducts it on top of wage tax, and banks deduct it on capital income.

7. Freelancers: registering with the Finanzamt

If you start working for yourself, you tell the Finanzamt within one month by filing the questionnaire for tax registration (Fragebogen zur steuerlichen Erfassung). It is filed online through ELSTER (§ 138(1), (1b) and (4) AO).

• Liberal professions (Freiberufler, such as many consultants, developers, designers, writers) register with the Finanzamt only.
• Trades (Gewerbe) register with the local trade office first (§ 14 GewO), which informs the Finanzamt. Trade tax comes with it.

The questionnaire asks for an estimate of your first year's profit, and the Finanzamt uses it to set quarterly prepayments, so an over-optimistic guess costs cash early. It also asks about VAT, including whether you want the small-business rule. The guides to registering as a freelancer, Freiberufler or Gewerbe and the small-business rule go through it step by step.

If you bring clients with you from abroad, the work you do after the move is taxed in Germany like any other, wherever the clients are.

8. Income and assets you leave abroad

Once you are resident, Germany's interest covers what you keep elsewhere: a flat you let out, bank and brokerage accounts, funds, a pension, a stake in a company. Declaring it is your job, and since 2017 over 90 countries have been sending account data on German residents to the tax authorities each year under the Common Reporting Standard (BZSt).

• Rent from property abroad is usually left to the country where the property is, under the treaty. Germany then exempts it, but for property outside the EU and EEA it still counts for the rate. For property inside the EU and EEA it doesn't (§ 32b(1) EStG, second sentence).
• Interest, dividends and gains in a foreign account have no German tax withheld. They go in your return and are taxed at the flat 25% rate, with foreign withholding tax credited up to 25% per item (§ 32d(3) and (5) EStG).
• Funds and ETFs held abroad fall under the Investment Tax Act, including a yearly notional income on funds that pay out little (Vorabpauschale, § 18 InvStG). A German broker withholds the tax on it. Without one, it is yours to declare.
• Shares of 1% or more in a company: if the country you left taxed your gain on them when you moved, under an exit tax comparable to Germany's, Germany uses the value taxed there as your purchase cost (§ 17(2) EStG). Keep the foreign assessment.
• Reporting duties: setting up a business or branch abroad, holding a stake in a foreign partnership, or acquiring a stake in a foreign company that reaches 10%, or takes your total cost above €150,000, has to be reported to the Finanzamt, usually with your tax return (§ 138(2) and (5) AO).

This is where most first-year returns get complicated: which country taxes what, at what exchange rate, with which foreign tax to credit. None of it is unusual, but all of it needs the documents from abroad, so keep them.

The first months, in order

These are the general rules, not an assessment of your case. Where you are resident, how a treaty applies to you and what your first return has to include depend on facts an article can't see. A Steuerberater can check your own situation.