Leaving Germany: What Changes from a Tax Perspective

Last updated: July 2026 · Giulia Uggias-Sproß, German Tax Advisor (Steuerberaterin, M.A. Taxation)

Leaving Germany is not a clean tax break. Departing the country does not necessarily end your obligations towards the German tax authorities straight away. What matters is what you leave behind — and what you do not.

In brief

• Unlimited tax liability ends only when you actually give up your last German residence
• Keeping a single dwelling is enough to remain subject to unlimited liability — regardless of where your centre of life is
• Limited tax liability then applies to all income from German sources
• Exit tax (§ 6 AStG) for shareholdings from 1 % and at least seven of the last twelve years of unlimited liability
• Payable on application in seven interest-free annual instalments, generally against security — uniform for EU/EEA and third countries
• Planning lead time: one to two years before the intended departure

When does unlimited tax liability actually end?

Unlimited tax liability ends when you give up your last German residence. However, you remain subject to unlimited liability if you:

• keep a dwelling in Germany,
• hold a dwelling under circumstances suggesting you will keep it, or
• spend more than six months a year in Germany.

This applies regardless of where your centre of life is located.

What does a clean departure from tax residence involve?

A clean tax deregistration requires giving up all domestic residences entirely. In practice that means:

• terminating the lease, or selling the property or letting it on a lasting basis
• no longer holding keys
• no longer having the ability to use it at any time

Caution with letting within the family: a dwelling formally let to third parties but which could be reclaimed at any time — for instance let to family members at a symbolic rent — can, in the view of the tax authorities, still constitute a residence. The standards here are strict.

Which income remains taxable after leaving?

When unlimited liability ends, limited tax liability may begin. It captures all income from German sources:

• Rental income from German property — remains subject to German income tax regardless of where the owner lives.
• Income from a German permanent establishment or partnership — anyone holding an interest remains taxable on the income attributable to it.
• Remuneration for activities carried out in Germany — anyone occasionally working in Germany after leaving has limited liability on that income.
• Dividends and interest from German sources — subject to withholding tax on capital income, which generally has a final settlement effect.

What is the exit tax under § 6 AStG?

It affects individuals who

• were subject to unlimited tax liability in Germany for at least seven of the last twelve years, and
• hold substantial shareholdings in capital companies — meaning at least one percent.

On departure, the shares are treated as if they had been sold at fair market value. The hidden reserves arising — the difference between acquisition cost and current value — are taxed as income, even though no sale has actually taken place.

Since the 2022 reform, the tax can on application be paid in seven equal annual instalments – interest-free, generally against security. This applies uniformly to departures to EU/EEA and third countries; the former indefinite EU/EEA deferral no longer exists.

What role does the double taxation treaty play?

The treaty with the destination state determines which country holds the primary taxing right for the remaining income after departure. For income Germany may continue to tax as the source state — such as property income — the treaty frequently provides for exemption in the destination state.

Important: not every country Germans emigrate to has a treaty with Germany. In that case the national rules of both states apply side by side — which can lead to an actual double burden.

Checklist: five steps before leaving

• Check whether an exit tax under § 6 AStG would be triggered.
• Clarify which German income will remain subject to limited tax liability.
• Review the applicable treaty with the destination state.
• Document the giving up of your residence — for tax purposes.
• Coordinate the tax deregistration with the competent tax office.

Frequently asked questions

When does my tax liability in Germany end?

Unlimited tax liability ends when you actually give up your last German residence. Limited tax liability for German-source income can continue beyond that point.

Do I still have to file a German tax return after leaving?

Yes, if you continue to earn income taxable in Germany — for instance from a German property or permanent establishment. Limited tax liability creates its own filing obligation.

What is the exit tax?

The exit tax under § 6 AStG captures hidden reserves in substantial shareholdings in capital companies on departure from Germany. It requires at least seven of the last twelve years of unlimited tax liability and a shareholding of at least one percent.

Can I keep a dwelling in Germany without remaining liable to tax?

No. Anyone keeping a dwelling in Germany that they can use at any time remains tax resident in Germany and therefore subject to unlimited tax liability — regardless of where they actually stay.

Your tax situation is individual

Leaving Germany is one of the most complex tax events in a taxpayer's life. Early planning — ideally one to two years before the intended departure — can avoid considerable tax consequences. We advise in German, English, Russian and Italian.