(2024) Who is subject to limited tax liability?

Limited income tax liability under Section 1 (4) EStG applies to individuals who

1. do not have a residence or habitual abode in Germany,
2. have certain domestic income as defined in Section 49 EStG, and
3. are not subject to unlimited income tax liability on application according to Section 1 (3) EStG (cross-border commuters) or
4. extended unlimited income tax liability according to Section 1 (2) EStG.

For them, the tax is collected through tax deduction or by means of an assessment for limited tax liability.

Note: Special regulations apply to cross-border commuters from France, Austria, and Switzerland.

Numerous personal and family-related tax benefits are not taken into account in the assessment for limited tax liability, including:

• Spouse splitting (joint assessment) cannot be claimed.
• Widow's splitting in the year following the bereavement is not granted (Section 32a (6) EStG).
• Extraordinary burdens cannot be claimed for tax purposes (Sections 33, 33a, 33b EStG).
• A disability allowance and care allowance are not available to you (Section 33b EStG).
• Child allowance and allowances for care, education, and training are not granted (Section 32 EStG).
• The relief amount for single parents is not available to you (Section 24b EStG).
• The tax reduction for domestic help, household-related services, and craftsmen's services in a flat in the EU/EEA abroad has not been granted since 2009 (Section 35a EStG).
• Business expenses are generally only deductible if proven and if they are directly economically related to domestic income.
• However, the flat rate for business expenses of 1.230 Euro for income from employment is also taken into account if no higher business expenses related to the income are proven.
• For pension income, at least the flat rate for business expenses of 102 Euro is taken into account.