(2025)
Who is subject to unlimited tax liability?
Fully liable to tax under Section 1 of the Income Tax Act (EStG) are:
- individuals who have a residence or their usual place of abode in Germany, and
- German nationals abroad who are paid from public funds. This includes, for example, members of a German embassy abroad.
While the second point is clear, the first point needs to be examined more closely:
- Individuals are basically all people, regardless of age.
- A person has a "residence" where they live (Section 8 of the Fiscal Code (AO)). It does not matter whether the residence is a suburban villa or just a furnished room in a shared flat. A taxpayer can also have multiple residences, for example in Germany and abroad.
- The term "usual place of abode" is used when someone stays in Germany for at least six consecutive months (Section 9 AO). Short interruptions during this period are possible.
