Question: Can I register/maintain my business and residence in Germany if I live abroad?

Question: Can I register/maintain my business and residence in Germany if I live abroad?

Again and again I see people asking questions that should not arise at all. For example, the question of whether the residence, including the business, can be registered or maintained in Germany, even though the person in question states that he or she lives abroad.

In the vast majority of cases, this is likely to be a case of tax evasion in the country of residence. This means that the person – in the country in which this person actually lives – pays no or too little tax.

It is not possible to register a residence in Germany “just like that”, if there is no access to an apartment at all or the center of life is abroad. Also, registering your residence and business in Germany does not exempt you from your tax obligations in the country of your habitual residence (the country in which you “live”).

Rather, you cause a lot of disadvantages for yourself by this inadmissible construct. If you actually live abroad, you will most likely have to pay taxes only in this country (with a few exceptions, e.g. sales tax for sales to the EU).

However, if your center of life is still in Germany or you have a residence in Germany, you could still be liable to pay taxes in Germany. Residence here means the actual access to an apartment (key) in which you could stay (=”not rented/vacant”) – independent of the residence according to the registration law.

You could still have your center of life in Germany, if your spouse and your children still live in Germany. This can also apply if you stay abroad for a very long period of time. The tax office in Germany would – in most cases correctly – assume that your center of life is (still) in Germany.

With the registration of a residence in Germany, you automatically become liable to unlimited taxation (for the entire calendar year). The country in which you actually live is also entitled to tax you.

As you have now correctly determined, you have created a rather complicated construct for your next tax returns, in which double taxation agreements may also have to be observed. If there are no such double taxation agreements, it could even happen that you have to pay the full tax in both countries (Germany and “abroad”).

A business registration in Germany – without the existence of a business in Germany (i.e. neither you nor your employees work in Germany) – automatically leads to taxable income in Germany. However, even this does not prevent the “foreign country” from taxing you according to the laws applicable there (if you live there or trigger a tax liability).

A registration of residence and possibly a business registration in Germany (without corresponding business premises) while you are not living or working in Germany at all is therefore not only absolutely pointless – it also causes a lot of extra work, costs and risks.

Note: Every situation is very individual and the advice in this article cannot be applied to every situation. It is therefore always advisable to take a look at the relevant tax legislation and, if necessary, seek tax advice from a tax consultant.

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