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Tax Scenario

Individual Tax

Here, we outlined some frequently asked questions providing some first guidance on your potential particular tax situation and how we can support you.

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Table of contents

Foreign employers
Foreign investment / capital gains income
Restricted Stock Units

I am a German resident working from home for a foreign employer. What are my personal tax obligations?

  • Residents of Germany are taxed on their worldwide income, which includes income earned from employment abroad.
  • The German tax system requires that you declare this foreign income on your German tax return. Tax treaties between Germany and the country of your employer's location may offer relief from double taxation.
  • Further, to avoid high year-end tax payments you should apply for voluntary tax prepayments as the foreign employer usually does not withhold any payroll taxes. In addition, there are obligations in the field of social security contributions that must be considered.

I am receiving foreign investment/capital gains income. Do I need to report such in my German income tax return?

  • Germany taxes capital gains and investment income of its residents, including gains from foreign sources. The tax treatment of such income can vary based on the type of investment and the existence of tax treaties.
  • Specific exemptions and allowances may apply. In any case, there is a mandatory disclosure requirement within your German individual income tax return.

I was awarded RSUs, RSAs, profit interests, etc. Are those taxable in Germany?

  • Receipt of Restricted StockUnits (RSUs), Restricted Stock Awards (RSAs), and profit interests are taxed as income upon vesting or grant.
  • The taxation specifics can vary, particularly regarding valuation and timing, and may involve capital gains tax if there's a delay between vesting and sale.
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