Telecommuting from home in Germany

Hi there,

I am working in USA, and my employer is willing to let me telecommute from home in Germany while my husband is on assignment there. But we are trying to find out what would be legal implications on working from home in Germany. Would I still need to get working permit? If so, how that can be done since my employer is in USA and not in Germany. What about taxes? Have anybody done this?

Thanks in advance.

Interesting question. I don't have the answer concernig your specific situation, but I believe that if you stay for more than half the time (i.e. more than 365 / 2 = 182.5 days) of the year in Germany, then your income is usually taxable in Germany.

Good question, I also don't know the answer. But there's some info here that might help:

Expatica.com: Money

The other thing is that you could also ask the American tax authorities. They would know the answer.

I thought I'll just add what I learnt in school

Under OECD Model Tax Convention i.e. in respect to taxes on income and on capital

Article 1: This Convention shall apply to persons who are residents of one or both of the Contracting States

Article 15:
1. Subject to the provisions of Articles 16 (Directors' fees), 18 (pensions) & 19 (Govt service), salaries, wages & other similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State.

2. Notwithstanding the provisions of para 1, remuneration derived by a resident of a Contracting State in respect of an employment exercised in the other Contracting State shall be taxable only in the 1st-mentioned State if:
a. the recipient is present in the other State for a period(s) not exceeding 183 days in any 12 month period commencing or ending in the fiscal year concerned, and
b. the remuneration is paid by, or on behalf of, an employer who is not a resident of the other State, and
c. the remuneration is not bourne by a permanent establishment which the employer has in the other State

Article 4
2. Where by reason of the provisions of para 1 an individual is a resident of both Contracting States, then his status shall be determined as follows:

a. he shall be deemed to be a resident only of the State in which he has a permanent home available to him; if he has a permanent home available to him in both States, he shall be deemed to be a resident only of the State with which his personal & economic relations are closer (centre of vital interests);

b. if the State in which he has his centre of vital interests cannot be determined, or if he has not a permanent home available to him in either State, he shall be deemed to be a resident only of the State in which he has an habitual abode;

c. if he has an habitual abode in both States or in neither of them, he shall be deemed to be a resident only of the State of which he is a national;

d. if he is a national of both States or of neither of them, the competent authorities of the Contracting States shall settle the question by mutual agreement.