183-day rule
The 183-day rule is interesting if you have employees who work abroad for a few months. In summary, the rule states that team colleagues who work in another country for less than 183 days and receive their wages from Germany are still liable to pay tax in Germany.
183-day rule: conditions
The rule is subject to a few conditions, which we summarize for you here:
- Employees may not be employed in the country of employment for more than 183 days in the tax or calendar year.
- The salary is not paid by a company in the country of employment.
- The employer who pays the remuneration is not domiciled in the country of employment.
If all three conditions are met at the same time, the income earned from the foreign activity is exempt from taxation in Germany. However, the income is still subject to the progression proviso.
Particularly important: The length of stay must be determined separately for each tax year. The decisive factor here is the physical presence in the country of activity. If there are several shorter stays per tax or calendar year, the stays must be added together. If the employee spends sick days abroad, these are also included in the length of stay.
What happens if foreign employees work in Germany for less than 183 days?
Of course, it is also possible for foreign employees to work in Germany for less than 183 days for a company that is not based in Germany. In this case, the German tax authorities are not allowed to tax.
Incidentally, there may be deviations in income due to the 183-day rule. This is due to the principles of the employee’s country of residence.
How to calculate the 183 days
Both arrival and departure days count as days of stay. All weekends and public holidays are also included. Vacation days spent immediately before, during and after the activity in the country of employment are also counted here.
The calculation period may vary depending on the agreement. It can therefore refer to the calendar year or to a tax year that differs from the calendar year or even to a completely variable period of 12 months.
Commuters and the 183-day rule
You may be wondering whether this rule also applies to cross-border commuters who travel daily or weekly from Germany to France or Switzerland. In these cases, the rule does not apply.
Disclaimer
Please note that the texts on this website and the related contributions are provided for general informational purposes only and do not constitute tax or legal advice in the proper sense. For individual cases, we always recommend seeking specific legal advice tailored to the circumstances of the situation. The information is provided to the best of our knowledge and belief, without any guarantee of accuracy, completeness, or validity.
