ARTICLE · 27 MAY 2002

254. Domicile and Centre of Vital Interests

KPMG Germany

Explore more from KPMG Germany

GermanyTax

Martin Ribbrock, KPMG Frankfurt

For editorial cut-off date, disclaimer, and notice of copyright see end of this article.

Individuals with either a domicile or their habitual abode in Germany are subject to German tax on their worldwide income (§ 1 (1) EStG). In its judgement of 24 January 2001 (I R 100/99 – IStR 2001, 349), the Federal Tax Court (FTC) reaffirms its consistent decisional law that individuals with a German domicile are subject to tax in Germany on their worldwide incomes whether or not they have their centre of vital interests in Germany.

The taxpayer was apparently a German national who had moved to Hong Kong after completing his studies as an engineer and lived there predominantly ever since. The taxpayer owned two houses in Germany and maintained a fully furnished dwelling in one of these houses that was available for his use at any time. The unit comprised 297 m2 of living space, making it quite sizeable by any standards. At issue were taxes owing for the

We operate a free-to-view policy, asking only that you register in order to read all of our content. Please login or register to view the rest of this article.

Register for freeORLog in

Related Articles

Who Bears The Cost? Germany’s Economic Employer And Wage Tax Risks

GGI | Global Alliance

Gewerbesteuer auf Rechenzentren ab 2027 – Anschlussleistung als Standortfaktor?

Greenberg Traurig

Trade Tax On Data Centers Starting In 2027 – Connection Capacity As A Tax Location Factor?

Greenberg Traurig

Can An Unmanned, Remotely Operated Plant Be A VAT Fixed Establishment? The BFH Asks The CJEU

Federal Fiscal Court: Future Insolvency Administrator’s Remuneration May Be Recognized As Provisions

Legal Intelligence Newsletters: sign up for the latest legal and regulatory news on your chosen topics

Read more about

Related Comparative Guides

Comparative Guide

Tax Disputes

Comparative Guide

Tax

See more popular content from

Tax

BMF: Draft Bill Would Tax Exchange Crypto-assets As Investment Income

Germany's Federal Ministry of Finance has proposed a fundamental shift in how exchange crypto-assets like Bitcoin and Ether are taxed, moving them from "other income" to investment income with a flat 25% tax rate. The reform abolishes the one-year tax-free holding period for new acquisitions while introducing withholding tax obligations for domestic crypto-asset service providers. How will these changes affect long-term investors, high-income earners, and the operational burden on crypto platforms?

Do I Have To Report Income From Abroad On My German Tax Return?

German tax residents must report worldwide income on their tax returns, including rental income from foreign properties and investment earnings from abroad.

GGI | Global Alliance

Germany’s Advance Lump-Sum Taxation (Vorabpauschale): Considerations For Non-German Fund Managers

Germany's advance lump-sum taxation regime imposes annual deemed investment income on German tax-resident investors in qualifying investment funds, regardless of distributions.

259. Reform of German Law of Obligations

Beware Of Hidden Costs: Hiring Foreign Temporary Workers In Germany

When a German employer hires foreign EU workers for a short-term project without proper tax and social security documentation, what appears to be a cost-effective staffing solution can quickly transform into a financial burden. Through a detailed case study and sample calculations, this analysis reveals how routine audits can expose compliance gaps that nearly double the actual employment costs.

GGI | Global Alliance

Taxing a company acquisition in Germany

Corporate transactions in Germany present complex tax considerations for buyers and sellers, with fundamentally different implications depending on whether the deal is structured as an asset or share transaction. Understanding how capital gains taxation, real estate transfer tax, and depreciation rules apply to each structure is essential for optimizing after-tax outcomes and managing inherited tax liabilities.

GGI | Global Alliance

Tips For Avoiding An Accidental Unlimited Tax Liability Of A Foreign Corporation

The following case involves Germany on one side, but this example may be applicable for many other jurisdictions.

GGI | Global Alliance

Annual Tax Act 2024: Foreign Retirement Plan Reforms

Germany's Annual Tax Act 2024 (Jahressteuergesetz) brings tweaks to the country's Income Tax Act (Einkommensteuergesetz). Due to adjustments to Sec. 22 no. 5 sentence 2 of the act...

Flick Gocke Schaumburg

Loss Forfeiture In The Event Of Share Acquisitions: New Developments In Judicial Review Proceedings

The German Federal Constitutional Court is set to rule on the constitutionality of Section 8c of the Corporate Tax Act, which mandates complete forfeiture of tax losses when more than 50% of a corporation's shares change hands. The Hamburg Fiscal Court has supplemented its 2017 referral order with new details about a specific case where losses would be forfeited solely due to share acquisition, raising fundamental questions about whether this provision violates Germany's constitutional principle of equality

Planned Revision Of The Attribution Taxation Of Foreign Family Foundations And Trusts

The German Federal Government plans to revise the so-called attribution taxation applicable to German-resident founders/settlor and beneficiaries of foreign family foundations and trusts under Section 15 German Foreign Tax Act (Außensteuergesetz – AStG).