Taxation of Foreign Salary for Employees in Germany
(Besteuerung von ausländischem Arbeitslohn für in Deutschland Steuerpflichtige)

First: Is foreign salary taxable in Germany?

Yes.
If you are a tax resident in Germany (unbeschränkt steuerpflichtig), you are legally obliged to declare your worldwide income (Welteinkommen), including:

• salaries from foreign companies,

• even if they are paid into a bank account outside Germany.

When are you required to pay tax in Germany on foreign salary?

Can double taxation be avoided?

Yes.
Germany has Double Taxation Agreements (Doppelbesteuerungsabkommen – DBA) with more than 90 countries, including:

• Turkey

• Egypt

• Morocco

• Tunisia

• Lebanon

• United States

• EU member states

If tax has already been paid on your salary in the foreign country, Germany applies one of the following methods (depending on the specific DBA):

Practical example:

You live in Germany and work remotely for an Egyptian company.
Your monthly salary: €2,000.
No tax is withheld in Egypt.

→ In this case:
You are required to pay tax in Germany on this salary according to your German income tax rate.

How do you declare this salary in your German tax return?

• File the annual income tax return (Einkommensteuererklärung).

• Fill in the form Anlage N-AUS (foreign income from employment).

• Provide documentation of your income, such as:

  • payslips,

  • bank transfer statements,

  • confirmation letter from your foreign employer.

• If you have paid tax in the foreign country, attach official tax certificates or payment proofs.

Important tips:

• Do not hide this income – non-declaration of foreign salary is treated as tax evasion (Steuerhinterziehung).

• Even if no tax is withheld abroad, you are still required to declare the salary in Germany.

• Keep all bank transfer records, payslips, and contracts with the foreign employer.

Key terms:

Summary:

• If you live in Germany and are tax-resident, you must declare all foreign salary.

• You may have to pay tax in Germany unless your income is exempt or credited under a DBA.

• Foreign employment income is declared via Anlage N-AUS.

• Hiding your foreign salary may lead to legal penalties, back taxes and fines.

The editorial team of the website strives to provide accurate information based on thorough research and various reliable sources. However, errors may occur or some information may be incomplete or not fully verified. Therefore, please treat the information in this article as an initial reference only and always contact the competent authorities for final and legally binding guidance.