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My Taxes

How Does Taxation Work for a French Resident in Germany?

As soon as you are registered with the local authorities (Anmeldung), you become a German tax resident. You are then taxed on your worldwide income, with exceptions provided by the Franco-German convention to avoid double taxation.

Do I Have to Declare My French Income in Germany?

Yes, all your income must be declared. Some (such as French rental income) remain taxed in France, but influence your tax rate in Germany (Progressionsvorbehalt).

Can I be a Tax Resident in Two Countries?

No. The center of vital interests (family, employment, main residence) determines the country of tax residence. In most cases, an expatriate living in Germany is a German tax resident.

What Income Must be Declared in Germany?

All: salaries, dividends, interest, pensions, rental income, cryptocurrency gains, etc. Even income exempt abroad can impact your tax rate.

How Can I Reduce My Taxes in Germany?

Here are the main tax optimization levers for French expatriates in Germany:

  • Basis: tax-advantaged retirement savings plan
  • Real estate investments
  • Riester: subsidized pension
  • Gold
  • German or international life insurance
  • SCPIs
  • Provident contracts
  • Optimization of family status

A well-structured strategy allows our clients to save between €2,000 and €30,000 per year.

How Can I Optimize My Taxes if I Am Married?

“Ehegattensplitting” allows married couples to file jointly and reduce tax if incomes are unbalanced. The Pacs is not recognized in Germany.

Can I Deduct My Professional Expenses?

Yes, most work-related expenses (computer, travel, training, professional liability insurance, etc.) are deductible.

Can I Deduct My Health Insurance or Pensions?

Yes, health, long-term care, public, private, or Basis pension contributions are partially or fully deductible depending on the nature of the contract.

How is My French Rental Income Taxed?

They remain taxed in France, but must be declared in Germany for the calculation of the overall tax rate (Progressionsvorbehalt).

How is a French Life Insurance Policy Taxed?

If you are a German tax resident, taxation occurs upon withdrawal. Gains are taxed at the “Kapitalertragsteuer” (flat tax of 26.375% + Kirchensteuer). After 62 years of age and 10 years of contract, only 50% of the gains are taxable.

What is the Taxation of SCPIs for a German Resident?

SCPIs that hold assets in France are subject to a 20% tax and a 7.5% solidarity levy. International SCPIs can be optimized depending on the country of ownership. Investing in SCPIs from Germany remains one of the most effective ways to diversify one’s real estate portfolio while benefiting from a clear tax framework.

How are Cryptocurrencies Taxed?

Capital gains realized after 12 months of ownership (e.g., Bitcoin) are completely tax-exempt. Before 12 months, they are taxable at your personal rate, according to German law on private capital gains (“private Veräußerungsgeschäfte”).

Do I Have to Declare My French Bank Accounts?

No, but the income generated (interest, dividends, capital gains) must be declared in Germany.

Do I Have to Declare My French Livret a, LDD, or PEL?

Yes, interest is taxable in Germany, with an allowance of €1,000 (or €2,000 for a couple).

Do I Have to Declare an Inheritance Received from France?

Yes, any inheritance or gift received by a German tax resident must be declared, even if the tax is paid in France. The German administration calculates any additional amount according to the bilateral convention.

How are Life Insurance Policies Inherited from France Taxed?

French life insurance contracts transferred to a German tax resident are included in the inheritance calculation and must be declared to the German tax authorities.

How are Self-Employed Individuals Taxed?

Self-employed individuals (Freiberufler / Selbständiger status) pay income tax (“Einkommensteuer”) and, beyond €24,500, business tax (“Gewerbesteuer”), which varies by municipality.

Can I Deduct My Relocation Expenses Related to My Expatriation to Germany?

Yes, if they are related to taking up employment. Transport costs, temporary accommodation, language courses, or integration courses are often deductible.

What is Progressionsvorbehalt?

Certain income not directly taxed (unemployment benefits, parental leave, sickness benefits) increases the tax rate on other income.

Do I Have to File a Tax Return Every Year?

Not always: if you are an employee with no other source of income, it is not mandatory. However, it is very often advantageous to recover overpaid taxes. An advisor is precisely there to help you avoid giving away too much due to withholding tax.

What are the Declaration Deadlines?

End of July for individuals, end of October for those who use a tax advisor (“Steuerberater”). In case of delay, penalties of 0.25% per month (minimum €25).

How to Obtain a German Tax Identification Number (Steuer-ID)?

It is automatically assigned after your registration (“Anmeldung”) and sent by mail within 15 days.

What is the Difference between the Steuer-ID and the Steuernummer?

Both are German tax numbers, but they have different functions:

  • The Steuer-ID (Identifikationsnummer) is your personal and permanent tax identification number.
  • It remains the same throughout your life, even if you change cities or employers.
  • The Steuernummer is the number assigned by the Finanzamt for tax declarations, especially for self-employed individuals or property owners.

What is the Taxation of French Stock Income or Dividends?

French dividends received by a German tax resident are taxed in Germany via the Kapitalertragsteuer (25%). A tax credit avoids double taxation in accordance with the Franco-German convention.

How to File your Taxes Online in Germany?

You can file via ELSTER (official portal), through private software (contact us for discounts), or through a tax advisor (Steuerberater). The declaration is generally due before July 31 of the following year.

What is the Taxation of Gifts between Parents and Children in Germany?

Each child benefits from an exemption of up to €400,000 every 10 years. Beyond that, taxation varies according to the family relationship and the amount transferred.

How Can Faller Finance Help Me?

Faller Finance helps expatriates structure a personalized tax strategy, reduce the tax burden, and build lasting financial independence.

Thanks to a network of Franco-German tax experts, we optimize your investments, your pension, and your cross-border taxation in a coherent and sustainable manner.