# US citizen paying tax in Germany?



## numus (Feb 21, 2019)

Hi there. I've tried finding an answer using Google, and of course searched the forum. I have a very simple question so I am surprised it's been this difficult to get an answer...

Question: I have an option of working in Germany for a US Gov contractor. I understand the US tax obligations for US citizens working abroad. What is not clear is tax liability to Germany. Would I have to pay taxes to Germany?

Thank you.


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## Bevdeforges (Nov 16, 2007)

In essence, you probably have to file taxes in both countries. You'd have to check the US-Germany tax treaty for specifics, but it's usually only those working directly for the US government overseas who simply remain on the US payroll system. 

If the employer is a US government contractor, i.e. a private company with a contract to provide something for the US government, I suspect you may well be in pretty much the same situation as any US citizen working in Germany. If you are working for the US Army (say, at one of the bases in Germany) or for the Embassy or Consulate there, then you're pretty much a US employee. But if you're working for a private (probably US) company, I suspect you'll have to abide by German payroll regulations. 

Check with the employer to see if you'll be paying US payroll taxes (health insurance, Social Security, etc.) or if you'll pay into the German system. That's usually the most telling indication.


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## Nononymous (Jul 12, 2011)

Ask the employer, is really the best thing you can do.


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## Moulard (Feb 3, 2017)

One potential gotcha to consider is that under Section 911 you salary may not eligible for the Foreign Earned Income Exclusion. If that was the case you would likely either have to rely on tax treaty provisions, or on the Foreign Tax Credits to reduce double taxation of your income.

Cutting a long story short, under s.911.(b)(1)(B)(ii) Employees of the US Government or Government Agencies are ineligible for the foreign earned income exclusion.

It will boil down to whether your employment contract, and potentially the company's contract is covered under the State Department Basic Authorities Act of 1956 (22 U.S.C. §2669(c)).


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## Bevdeforges (Nov 16, 2007)

But would a private company with a government contract qualify as a "US Government or Government Agency"? In any event, the employer should be able to tell you how you're going to be paid (i.e. as part of a "government payroll" or as a private company employee)


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## numus (Feb 21, 2019)

Thanks for all the quick replies. I actually asked the HR person and she was NOT helpful at all, telling me to ask my accountant. I don't have one.

The work would be for a defense contractor. I would be working for the US Gov indirectly. Logic says I would not pay taxes to Germany but what do I know.


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## herbpe (Feb 22, 2019)

Expats pay taxes to US?

Sent from my SM-G925T using Tapatalk


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## numus (Feb 21, 2019)

I would be a citizen. At least for now.


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## Nononymous (Jul 12, 2011)

Ultimately does it matter? You'll be paying tax either way, to the US or to Germany. My guess is that you'd be in the local economy so paying German tax, then filing US returns but likely paying no additional US tax. The HR person should know because the company would make the appropriate deductions for tax and health insurance and so on.


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## Bevdeforges (Nov 16, 2007)

herbpe said:


> Expats pay taxes to US?
> 
> Sent from my SM-G925T using Tapatalk


It depends - but as a US citizen, you are on the hook to file US taxes for the rest of your days. (Unless you renounce - which is expensive and can complicate your tax situation quite a bit if you still receive income from or have financial assets back in the US.)



> The work would be for a defense contractor. I would be working for the US Gov indirectly. Logic says I would not pay taxes to Germany but what do I know.


Technically, I suppose we ALL work for the US Gov. indirectly. But as far as I know, indirectly doesn't count. Ask HR if you will be paying German social insurances or American. That should answer the question.


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