SteuerGo FAQs

When and how must I declare income as a cross-border commuter?

The cross-border commuter tax return raises questions for many employees: If you live in Germany but regularly work in a neighbouring country, you are not automatically correctly classified for tax purposes. The special regulations of the double taxation agreements are decisive. The following article explains clearly when income as a cross-border commuter must be declared, which forms are required for the tax return, and when the progression clause applies.

Who is considered a cross-border commuter for tax purposes?

Cross-border commuters are employees who have their residence in Germany and regularly commute to work in a neighbouring country, such as France, Austria, or Switzerland. The relevant double taxation agreements and the actual return to the German residence are decisive.

Important: Cross-border commuter status does not arise automatically, but only if the conditions are met.

Where is the salary taxed?

As a rule, salary is taxed where the work is performed. However, for cross-border commuters, the relevant double taxation agreement often provides for an exception:

The salary is taxed in Germany, even though the work is carried out abroad.

• The entire salary is subject to German income tax.
• In the foreign country, there is usually no or only limited withholding tax.
• There is no progression clause because the salary is not tax-free but is taxed regularly in Germany.

Cross-border commuter tax return: Where do I enter the salary?

If you are a cross-border commuter in the tax sense, the entry is as follows:

• Form N for regular salary
• additional Form N-GRE, only if you live in Baden-Württemberg and work in France, Austria, or Switzerland

Important: You must not use Form N-AUS in this case. The cross-border commuter regulation and Form N-AUS are mutually exclusive.

Cross-border commuter or not – the distinction

You are considered a cross-border commuter if:

• You regularly return to your residence in Germany.
• You comply with the permitted number of non-return days (e.g. Switzerland: maximum 60 days).
• Your salary is taxed in Germany.

Consequence: Entry in Form N (and possibly Form N-GRE), no progression clause.

You are not considered a cross-border commuter if:

• You do not return to your German residence often enough.
• You mainly live or work abroad.
• You have other foreign income that does not fall under the cross-border commuter regulation.

In this case, the following usually applies: Taxation in the country of work. The salary is often tax-free in Germany but increases the tax rate for other income through the progression clause according to § 32b EStG.

=> Entry: Form N-AUS.

Special features depending on the country

• France and Austria: Cross-border commuters generally tax their salary in Germany.
• Switzerland: The employer may withhold 4.5 percent withholding tax. This is usually credited against German income tax.

Special case: Civil servants and public service

For civil servants and public service employees, a special rule applies: Income is generally taxed in the employer's country, even if the other conditions of a cross-border commuter situation are met.

Conclusion

The cross-border commuter tax return depends crucially on where the salary is assigned for tax purposes. Those who meet the cross-border commuter regulation declare their income as domestic salary and avoid the progression clause. If the conditions are not met, Form N-AUS is required. A clear distinction reduces queries from the tax office and prevents unnecessary tax disadvantages.