International intracompany transfers and taxes

I am now going through the process of a work visa application for employment here in germany. I was told, however, that if the US office of my new company here in Munich would offer me a US contract and salary to be paid to a US bank account, then I may apply for something simple called a "Intracompany transfer"

What my question is, if i do the Intracompany Transfer rather than the full German work permit on a german employment contract, do I then only have to pay US taxes or do I still have to pay German taxes too (even though I wouldnt be getting paid from here)

Thanks for any advice!

I cannot provide you a full answer, but I will add that there is an agreement between the US and German governments which avoids double taxation (i.e. *IF* you did have to pay taxes in Germany, then those payments would reduce your tax burden in the US).

also, you may want to ask for how long you could be on an Intracompany Transfer work permit. I would guess that there is a limitation on how long one could work here on such a status.

I would guess that that limit is about 6 months. After you have lived in Germany for 6 months, you are taxed on your income no matter where it is paid. As Chicago mentioned, double taxation is avoided via the agreements.

For example, you deduct what you paid in German taxes from what you would have to pay in the US. Because German taxes are generally higher, you end up not paying any US tax on the income that you earned while living here.

Anyway, this is from my own research and discussions with my tax advisors. I suggest you contact someone like Marc Summers (US CPA), who advertises on TT, or Christina Westphal (German Tax Advisor), who also advertises here.

Good Luck!