What is the "Special Cross-Border Commuter Regulation"?
These regulations apply to commuters who live in Germany and commute to work in France, Austria, or Switzerland. This is governed by the respective double taxation agreements. If you work in one of these countries, you must pay tax on your income in Germany, not in the country where you work. However, this only applies if your place of residence and work is in the border zone of the respective country. For France, the border zone is 20 km on either side of the border, for Austria it is 30 km. In Switzerland, there is no such border zone.
There was also a special cross-border commuter regulation with Belgium until 2003. However, since 2004, the general regulation has applied. This means for cross-border commuters to Belgium: The salary is no longer taxed in the country of residence, Germany, but in the country of employment, Belgium. In Germany, the income is exempt from tax but included in the calculation of the tax rate. However, there is a special tax regulation for commuters from Belgium to Germany: Belgium, as the country of residence, exempts the wages taxed in Germany as the country of employment and only includes them in the calculation of the tax rate. However, this income is included in the Belgian municipal tax, which is an additional tax on income tax. To offset this Belgian municipal tax, German income and wage tax on this income is reduced by a flat rate of 8%.
