Tax advice for U.S. citizens working in Germany

Paying taxes back home versus paying them here


katiusha
I'm on a 6 month assignment in our Munich office working for an American company. I'm still paid in USD to my US bank as before. I'm trying to get an extension and the consulting company that the company uses says that over 6 months you have to pay German taxes. I'd prefer to keep this ex-pat status due to the perks (housing, car, per diem) that I get. However, I really want to stay regardless and the only way, according to them, would be to switch to a German contract. (FYI - I'm a full-time employee). However, if I were to switch to a German contract, the job description would need to change significantly in order for them not to be liable for last 6 months of taxes. Does anyone know anything about this kind of situation? Are they telling me the truth? With thousands of Americans working in Germany I don't understand why my situation is extra complicated.
PES
Taxes a often discussed here. Take a look...
TexMunich
Nothing is simple. You need to contact an accountant. Preferably someone versed in both US German tax law. In general, the US taxes worldwide income. It has exceptions like the foreign tax exclusion and foreign earned income which will pretty much exclude you from paying US taxes on your German income (They also have a tax treaty with Germany). Germany, typically only taxes you on German / EU source income.

Get professional help before you make your decisions. A few $ / Euros spent now could save you a lot in the long run.
TroyBoy
With thousands of Americans working in Germany I don't understand why my situation is extra complicated.
because maybe they are on German contracts and paying taxes in Germany. seriously if you want to live and work here well then contribute to Germany and start paying taxes here.
kato
There are thousands of Americans working in Germany paying only US taxes in fact. TESA status people, for example.
Starshollow
among my clients there are a number of Expats who are employed by there foreign companies (i.e. outside Germany) but work for longer in Germany and became tax residents, albeit then in the status of a self-employed person. Not sure if that is entirely legal or not, a tax advisor would need to clarify that, but at least I see it happening on a number of occasions. Some eventually turn into full German employees with all social welfare deductions, but if the approach of yours is for extension but still limited time, that might work. indeed it would be advisable for you to contact a tax advisor specialized in Expat issues of which several are advertising here on Toytown.

Cheerio
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