US company want to send a German citizen that has visa and work permit for US to work from Germany- -how is the taxation


we have the following complicated issue:

  • US based company
  • has an employee who is German citizen but lately lived in the US with a US Visa and work permit and hired at the US company
  • company wants him to work in Germany most of the time, but employee will be at the US office regularly

So the question is, can this employee still be hired at the US company and simply working some time in Germany? And rather more important? Does the employee has to pay only US taxes or will he be charged in Germany too?

Thanks for all your help in advance!

Tax International

asked Dec 22 '11 at 01:52
6 points

3 Answers


There are various procedures put in place to prevent double taxation (of employee) between the US and EU, but to understand the correct way to handle things, you should engage an accountant that understands them.

One of the metrics that will be used to determine where taxes should be paid will be the number of days spent in each country, so it's worthwhile knowing this in advance and understanding what being either side of that threshold could mean for both employee and employer.

answered Jan 26 '12 at 06:03
Nick Stevens
4,436 points
  • Tax issues are up to member states to negotiate in bilateral tax agreements. – User239558 12 years ago


Since he is not a US citizen, this probably works like in most double tax treaty situations - following the OECD model agreement. Look at the double tax agreement. Usually article 15. The typical requirement is:

He has to work in Germany for less than 183 days in a year, and the employer must not have a "permament establishment" in Germany. Permanent establishment is defined in the agreement and discussed in the OECD commentary on their web site.

This then defines whether Germany will have the right to tax. Then article 23 (usually) defines which method to use if Germany will tax. Usually the credit method is used which means paying taxes in both countries and getting a credit in the US for taxes paid in Germany. I.e. tax is MAX(US, Germany).

answered Jan 30 '12 at 09:42
228 points


I am not sure how this will work for German citizens working in Germany for a US company but for the US citizens working abroad it's normally as follows:

  • You pay taxes in the country you are working in.
  • You fill out the form in the US for the IRS for income earned in the foreign country and you get credit for the taxes you paid their.

You might want to check with a law or accounting firms on how this would work on the opposite side but I am pretty sure it would be somewhat similar.

answered Jan 26 '12 at 03:04
1,779 points

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