Important to a tax liability in Germany is whether or not an individual or a corporation is permanently domiciled in Germany,

Individuals who have their residence/domicile (Wohnsitz) or customary abode (gewöhnlicher Aufenthalt) in Germany are subject to full tax liability, so-called 'unlimited taxation'. The same applies to corporations with domicile or permanent establishment in Germany.

The basis for the German taxation is the total world-wide income of the tax payer. There are exceptions for income from foreign sources, especially in connection with tax treaties.

In the year of arrival or departure of an individual, the world-wide income is only taxable from the date of arrival until the date of departure. Foreign income is not taxable but taken into account for tax rate purposes in Germany.

Non-residents with income from sources in Germany are subject to so-called 'limited taxation'.

The world-wide income of a corporation is taxable from the beginning of formation to the end of its liquidation.

Gifts or inheritances in Germany exceeding certain amounts may be subject to gift and inheritance tax (Schenkung-/Erbschaftsteuer).

The following outline is intended as general information only and is not intended as a substitute for personal and specific detailed information and professional advice.

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