Leaving Germany: residence, exit tax and what continues

Departure is a change in facts, not just registration

Giving notice to a registration office is useful evidence but does not by itself remove tax residence. A home still available for your use can remain a German residence, and habitual abode is an independent connection. Review the accommodation and travel position of both spouses rather than assuming the family changes status on one date.

If two countries claim residence, apply the relevant treaty to the actual homes, personal and economic connections and presence. Keep the destination’s permission and tax position aligned with the facts. A residence certificate that conflicts with the way you live is a weak foundation for the plan.

Check the shareholder exit tax before changing residence

AStG §6 can create a deemed sale of shares within EStG §17 when a person ends unlimited tax liability, makes a relevant gratuitous transfer to a nonresident or restricts German taxing rights. The ordinary share threshold concerns at least 1% ownership at some point in the previous five years. The residence lookback generally requires seven years of unlimited liability within the previous twelve, with special predecessor rules for gifted shares.

The charge depends on value and tax basis, not cash from an actual sale. Commission a supportable valuation and calculate funding before the departure date. Do not assume moving within the EU automatically defers the charge without conditions.

Fund investors need a separate exit review

Current InvStG §19 extends departure treatment to specified private investment-fund holdings. The provision requires positive relevant gains and either at least 1% fund ownership within the prior five years or acquisition costs of at least €500,000 in the relevant fund at departure. A portfolio of many smaller holdings is not measured simply by adding its market values to one headline number.

Illustration: a fund position acquired for €520,000 can meet the cost limb even if it represents far below 1% of that fund. A €600,000 current value in a position bought for €300,000 does not meet the cost limb just because its market value exceeds €500,000; the ownership-percentage and all other statutory conditions must still be tested. These examples establish a screening distinction, not the tax due.

Instalments and return relief have continuing conditions

For qualifying §6 tax, seven equal annual instalments can be requested and security is normally required. The first is due within one month of the assessment; subsequent instalments fall on 31 July. Relevant disposals/transfers, distributions or capital repayments above the statutory quarter-value threshold, insolvency and reporting failures can accelerate unpaid tax.

The temporary-return provision ordinarily looks to return within seven years, with possible extension by up to five years where the intention persists. Maintaining the shares, limits on distributions and restoration of taxing rights matter. Keep the annual address/ownership confirmation and event-reporting obligations on the compliance calendar; relief is not passive.

What can remain taxable after you leave

Immigration, banking and family records also change

A non-citizen’s residence permission can lapse on a departure that is not temporary, independently of the ordinary absence countdown. Blue Card holders and specified family members have a twelve-month absence period for the relevant time-based rule, but that is not a blanket permission to relocate permanently and keep the card. Obtain an individual determination before a lengthy absence.

Tell financial institutions the correct new tax residence and address, preserve German filing access and appoint responsibility for official mail. Keep the departure evidence, valuations and historic cost records available after the move. Later sale, gift, inheritance or return can make them important again.