Field help:
Foreign income
Foreign income
Enter the total amount of foreign income that is not subject to German income tax. The income to be declared is the income received minus the expenses claimed.
Example: You have earned income abroad as an employee from January to July 2024. To determine the foreign income, you should deduct the foreign income-related expenses actually incurred in full from the foreign income (here: the foreign gross income).
Under German tax law, foreign income is only taken into account when calculating the tax rate that is applied to your taxable German income (progression clause).
The foreign income must be determined in accordance with German tax law. In accordance with section 34d of the Income Tax Act (EStG), the total foreign income is comprised of:
- Income from agriculture and forestry carried on in a foreign state,
- Income from commercial business abroad,
- Income from self-employment carried out abroad,
- Income from the sale of assets abroad,
- Income from employment abroad,
- Income from capital assets if the debtor has a residence, management or registered office abroad or if the capital assets are secured by foreign real estate,
- Income from renting and leasing abroad and
- Other income earned abroad.
The conversion of income in foreign currency must be done on a monthly basis using the European Central Bank's euro reference rate. However, it is not objectionable if wage payments received in a foreign currency are converted on the basis of an annual conversion rate - determined from the monthly published VAT reference rates, rounded down to the nearest 50 cents. (Ministry of Finance (BMF) letter dated Dec. 14, 2014)
Here is an overview of the annual conversion rates for the key foreign currencies.
