Contrary provisions in double taxation treaties override German national law
unless the latter is more favourable (from the German tax point of view only) to
However, German law contains a number of provisions to prevent
what the authorities see as treaty-abuse, such as those making treaty relief
conditional on taxation in the other state. On the other hand, a tax treaty
determination that a person is resident in the other state – for example where
he has a home in both states, but has closer links to the other – does not mean
that he loses his status as a German resident in respect of his German source
income. Thus he remains entitled to allowances and reliefs available to
residents only (so-called taxpayer with unrestricted liability).
Nationality is not of itself a criterion for determining residence or tax liability,
although it may give an indication in (unusual) cases of doubt where a taxpayer
has ties of equal strength to at least two countries.