Do I need to declare my income from abroad?
You must declare all income - domestic and foreign - in the German tax return for the assessment period.
For foreign income, the following cases must be distinguished:
- The foreign income is tax-free in Germany, for example, due to a double taxation agreement or another tax agreement. In this case, the tax-free income must be declared in Annex AUS or, for income from employment, in Annex N-AUS. This tax-free income is subject to the progression clause, meaning it is included in the calculation of the tax rate applied to the income taxable in Germany.
- The foreign income is fully taxable in Germany. In this case, the foreign income must be declared in the tax return in the same way as domestic income in the relevant annexes. If taxes have been paid on the foreign income abroad, these can be credited against the German income tax. The creditable foreign taxes can then be recorded in Annex AUS.
- Foreign wages are tax-free due to the Foreign Employment Decree (ATE) or an Intergovernmental Agreement (ZÜ). In this case, the income must also be declared in Annex N-AUS and is subject to the progression clause.
You can find information on the double taxation agreements concluded by Germany here: Double taxation agreements and other tax agreements
