Non-resident individuals
This includes:
Non-resident individuals are in some respects treated differently
from residents. As outlined above, non-residents are subject to
German income tax only with regard to certain categories of in-
come from German sources. Depending on the type of income,
the German source income of non-residents may be subject to
tax either through withholding at the source or by direct assess-
ment upon filing of an income tax return.
Business expenses
or costs of earning non-business income are only deductible
to the extent that they are economically related to the relevant
– Income from agriculture and forestry activities in Germany
– Business income derived through a permanent establishment
or a permanent representative in Germany
– Capital gains from the sale of shares in a resident corporation,
provided the non-resident investor has a minimum holding of
1%
– Income from self-employment or employment (to the extent
that the work is performed or used in Germany)
– Dividend income where the entity paying the dividend is
resident in Germany; interest on mortgages and bonds issued
by German borrowers
– Rental income, where the real estate or other tangible or
intangible property is located or registered in Germany
– Certain other income, including gains on the sale of German
real estate
income. Losses from one category of income may only be offset
against income from another if both categories are subject to
tax through direct assessment rather than the withholding tax
procedure.
The tax withheld on income from capital is deemed to fully
discharge the tax liability on that income unless it is derived
through a permanent establishment in Germany, in which case
the withholding tax is credited against the income tax payable
upon direct assessment.
EU Forecast
euf:ba.18g:131/nws-01