U.S.–Germany Moving Scenario
U.S. Citizen Moving to Germany
Moving to Germany usually changes where income is taxed, but it does not end a U.S. citizen's federal income-tax filing obligations. The moving year therefore requires coordinated U.S. and German analysis of residence, income, investments, retirement accounts and foreign tax credits.
Overview
The move changes residence — not U.S. citizenship taxation
A U.S. citizen who establishes a home and center of life in Germany can become subject to German taxation while remaining subject to U.S. federal taxation on worldwide income.
The practical objective is therefore not to decide which country “wins,” but to determine residence and source rules first and then coordinate the two systems through the U.S.–Germany treaty, foreign tax credits and other available provisions.
German tax perspective
The corresponding German TaxRep content focuses on German residence, German worldwide-income taxation and the treatment of U.S. income and assets.
Moving Year
The dates around the move matter
Before moving
Review brokerage accounts, funds, retirement accounts, company interests, appreciated assets and any U.S. home before German residence begins.
Arrival in Germany
German domestic residence can begin once a dwelling or habitual presence creates the relevant German tax connection. Registration alone is not the complete tax analysis.
First German tax year
Income before and after the move may require different treatment. U.S. and German returns should use consistent dates, income data and tax-credit positions.
U.S. Federal Tax
U.S. filing generally continues after the move
Form 1040
U.S. citizens generally continue filing a U.S. federal income-tax return and reporting worldwide income while living in Germany.
Foreign tax credits
German income tax can often be relevant for U.S. foreign tax credits. Income category, sourcing and timing should be coordinated rather than applying a single credit mechanically to the entire return.
Foreign earned income exclusion
Some taxpayers may qualify for the foreign earned income exclusion after satisfying the applicable tax-home and residence or physical- presence requirements. It is an election and not a substitute for filing.
Foreign financial reporting
German bank, brokerage and other financial accounts can create FBAR and Form 8938 obligations in addition to the U.S. income-tax return.
German Tax Consequences
Germany may become the primary residence-country tax system
Salary and remote work
Work physically performed in Germany can create German income-tax and payroll consequences even when the employer is in the United States.
Employment & Social SecurityBrokerage accounts and funds
U.S. brokerage accounts can remain relevant after the move, while German or European funds can create additional U.S. PFIC issues.
Investments & Withholding TaxesLLCs and closely held companies
Entity classification, management location and German permanent-establishment questions should be checked before continuing a U.S. business from Germany.
Businesses & Ownership Interests401(k), IRA and retirement planning
The German treatment of U.S. retirement arrangements should be reviewed before contributions, distributions or restructuring decisions.
Pensions & RetirementPre-Move Planning
Items worth reviewing before German residence begins
Investment portfolio
Identify U.S. and non-U.S. funds, unrealized gains, dividend positions and any planned purchases before the move.
Business interests
Review LLCs, corporations, partnerships and management functions before operating them from Germany.
Retirement accounts
Document account types, contribution history and anticipated distributions before German taxation becomes relevant.
U.S. home and other property
Retention, rental or sale of a U.S. property can affect both income taxation and the overall moving-year plan.
Cost basis and records
Preserve acquisition dates and cost-basis documentation for securities, company interests and other appreciated assets.
Filing calendar
Plan the first German return together with Form 1040 and any required FBAR, FATCA, PFIC or foreign-entity reporting.
Related U.S.–Germany Guides
Continue with the areas affected by the move
Residency & Moving
Residence, treaty residence and moving-year questions.
Explore residencyTax Returns & Reporting
Form 1040, German return, FBAR, FATCA and international reporting.
Explore reportingInvestments & Withholding Taxes
Brokerage accounts, funds, PFIC and foreign tax credits.
Explore investmentsUnited States–Germany
Return to the complete cross-border tax hub.
Back to hubU.S.–Germany Move Planning
Moving from the United States to Germany?
We can coordinate the moving-year analysis, U.S. and German tax returns, investment and business issues and the reporting obligations that continue after the move.
Discuss your move to Germany