Double household situation

• Expenses in connection with a double household will generally result in a reasonable deduction and consequently come out in a lower tax payment or a higher tax refund.
• Beside the maintenance and the use of two different households, additional prerequisites must be fulfilled.
• In general the tax authority has a critical look at this issue as you could save an acceptable tax amount.
• We recommend to discuss this matter in time to avoid any disadvantages later on.

Deferred salary

• If you receive a salary or bonus payment from sources outside of Germany during the time you are (again) living in Germany it has to be checked in which country the income is taxable. In general the payment is tax free in Germany if it was paid for work carried out outside of Germany and a Double Taxation Agreement is applicable.
• In case of an unlimited tax liability in Germany you have to prove that this income has already been taxed (e.g. by an income tax assessment notice issued from a foreign state).
• Even if the income is not taxable in Germany it has to be reported in your German income tax declaration, as it must be considered in respect of the progression clause.