ARTICLE · 27 MAY 2002

254. Domicile and Centre of Vital Interests

KPMG Germany

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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

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