Are you sending workers to Germany? Keep an eye on the 183-day limit, after which you must tax their wages in Germany, even retroactively.
When employees stay longer in Germany, there is an obligation to pay income tax here:
- 183-Day Limit: After exceeding this limit, employees' income is taxed in Germany retroactively from the first day of deployment.
- Permanent Establishment: If you establish a permanent establishment in Germany (e.g., for construction projects lasting over 12 months), the obligation to tax wages in Germany arises immediately.
- What does this mean for you? Employers must file wage tax returns (Lohnsteueranmeldung) in Germany and also pay the tax there.
Our Tip: Keeping track of days spent abroad is crucial to avoid double taxation and high penalties. We are happy to assist you with setting up processes and tax reporting.