Germany

Foreign tax relief

If a double tax treaty (DTT) exists, double taxation is usually avoided by exempting the foreign income with progression. Foreign income taxes can only be credited against German income tax if a tax credit is provided in the applicable DTT or a DTT does not exist. A tax credit is only possible up to the amount of German income taxes on the specific foreign income.

Tax treaties

German national income tax law has been modified and superseded by various tax treaties with foreign countries to ensure that income is not taxed by more than one country. Germany has concluded DTTs, applicable for income taxes, with nearly 90 countries, amongst them most of the industrialised countries. However, DTTs have not been concluded with, for example, Brazil and Hong Kong. The DTT with the United Arab Emirates expired on 31 December 2021 and has not been renewed.

Germany currently has double-taxation agreements with the below mentioned countries:

* Without Hong Kong and Macau

** The DTA between Germany and Russia has partially been suspended due to a Russian presidential decree issued on 8 August 2023. 

*** The DTA between Germany and Belarus has been suspended with effect from 1 January 2025 by the German federal government due to a previous partial suspension by the Republic of Belarus.

Estate and gift tax conventions

Estate and gift tax conventions have also been concluded with a number of countries, including the countries listed below:

• Denmark (included in the DTT)
• France
• Greece
• Sweden (included in the DTT)
• Switzerland
• United States

Social security totalisation agreements and EU directive 883/2004

• EU member states
• Iceland
• Liechtenstein
• Norway
• Switzerland

Totalisation agreements (i.e. social security agreements) have also been concluded with the countries listed below:

• Albania
• Australia
• Bosnia and Herzegovina
• Brazil
• Canada and Quebec
• Chile
• China
• India
• Israel
• Japan
• Korea
• Kosovo
• North Macedonia
• Moldova
• Montenegro
• Morocco
• Philippines
• Serbia
• Tunisia
• Turkey
• United States
• Uruguay

Social security totalisation agreement between the EU and the UK

On 24 December 2020, the EU and the United Kingdom (UK) agreed on a comprehensive Trade and Cooperation Agreement (TCA). The agreement came into force on 1 May 2021, having been provisionally applied since 1 January 2021 already. It comprises the regulation of social security contributions between the EU and the UK.