Leaving Germany: the step-by-step tax exit

Leaving Germany is easy. Leaving the German tax system is a project. The good news: it’s a well-documented project with clear rules, and most of the traps are visible from a distance – if you look before you move, not after.

This guide walks you through the legal logic (when does Germany stop taxing you?), the classic mistakes and a practical timeline. It’s general information as of September 2026, not tax advice.

Unlimited vs limited tax liability

German income tax law knows two modes, set out in §1 EStG:

Your goal when leaving is simple to state: end unlimited liability. After that, Germany can still tax German-source income (a rented-out flat in Munich, a German GmbH’s dividends), but not your new salary in Lisbon or your Dubai company profits.

Notice what’s missing from that table: nationality and registration. A German passport doesn’t make you taxable (Germany isn’t the US), and a registration at the Bürgeramt doesn’t either. Both are facts the tax office looks at, but the legal tests are home and habitual abode.

Home (§8 AO): the flat is the trap

Under §8 AO you have a Wohnsitz where you have a dwelling under circumstances suggesting you’ll keep and use it. Three things follow from that sentence:

• Ownership doesn’t matter. A rented flat, a room in a shared flat or a room at your parents’ that’s kept for you can all count.
• Use doesn’t have to be frequent. German courts have accepted a Wohnsitz for people who used a flat only a few weeks a year, as long as the use was regular and the flat stayed available.
• Your intention doesn’t save you. “I’ve emigrated in my heart” is not a test. Keys, furniture and availability are.

That’s why the most common expensive mistake is keeping the old apartment. You deregister, move to Cyprus, keep the Berlin flat “for visits” – and you still have a German Wohnsitz. Germany still treats you as unlimited taxable, and you’re now relying on a treaty to rescue you (more on that below).

Clean alternatives: give up the lease, sell, or rent the flat out long-term to someone else so it’s no longer available to you. Furnished short-term letting where you can move back in any time is a grey zone you don’t want.

Habitual abode (§9 AO): the six-month rule

Even without a home, you’re unlimited taxable if you have your habitual abode in Germany. Under §9 AO that’s always the case once you stay in Germany for a coherent period of more than six months. Short trips abroad don’t interrupt the count.

Two details people miss:

• It’s not a calendar-year test. Six months can span two tax years. A stay from October to April counts.
• It’s not 183 days either. The German domestic test is “more than six months, coherent”. The 183-day rule you’ve heard of mostly lives in treaties (for employment income) and in other countries’ laws.

There’s an exception for stays purely for visits, holidays or medical treatment that don’t exceed one year. Useful for long family stays; not a planning tool for running your business from your parents’ kitchen.

Abmeldung: necessary, not sufficient

When you move out of your German home and don’t take a new one in Germany, you have to deregister within two weeks of moving out (§17 Bundesmeldegesetz). You can do it up to a week before. Many Bürgerämter accept it by post or online.

Deregistration is important evidence. It’s also a prerequisite for a lot of practical things: ending public health insurance, cancelling the Rundfunkbeitrag, showing your new tax office a clean break. But it doesn’t end tax liability on its own. If you deregister and keep the flat, the Wohnsitz test still bites. If you never deregister but genuinely gave up your home, you may still be non-resident – you’ll just have to argue harder.

Treat the Abmeldebestätigung as exhibit A, not the whole case.

When two countries claim you: the treaty tie-breaker

Say you keep a German home and also become resident in Portugal. Both countries now claim you as resident under their own laws. The double tax treaty (DTA) between them settles it using the tie-breaker in Article 4(2) of the OECD Model Tax Convention, which most German treaties follow:

1. Permanent home. Where do you have a permanent home available to you? If only in one country, that country wins.
2. Centre of vital interests. If you have a home in both (or neither): where are your personal and economic relations closer – family, social life, business, assets?
3. Habitual abode. Still unclear: where do you spend more time?
4. Nationality. Still unclear: which country are you a national of?
5. Mutual agreement. Last resort: the tax authorities agree between themselves.

If the treaty assigns you to Portugal, Germany may still treat you as “unlimited taxable” domestically, but the treaty limits what it can actually tax. That’s a rescue, not a plan. You still file in Germany, you still argue about your centre of vital interests, and some rules (like exit tax) can be triggered by the treaty shift itself.

And the big one: no treaty, no tie-breaker. Germany has no double tax treaty with the UAE since the old one expired at the end of 2021. A German who moves to Dubai and keeps a German flat is simply unlimited taxable in Germany. Details on the tests in other countries: tax residency explained.

Extended limited tax liability (§2 AStG)

Germany has a special rule for Germans who move to low-tax countries and keep one foot in the German economy. Under §2 AStG, extended limited tax liability applies for the year of departure and the following ten years if all of these are true:

• You’re a German citizen and were unlimited taxable in Germany for at least five of the last ten years before leaving.
• You move to a low-tax country (roughly: the tax on a reference income there is more than a third lower than German income tax, or you get a special preferential regime) or to no residence country at all.
• You keep substantial economic interests in Germany, for example as owner or co-owner of a German business, or through German-source income or assets above the thresholds in §2(3) AStG.

If it applies, Germany taxes not only your normal German-source income but all income that isn’t “foreign income” in the narrow sense of §34d EStG – at the rate that would apply to your worldwide income. There’s a de minimis threshold for small amounts (see §2(1) AStG for the current figure).

Related: under §2(1) ErbStG, German citizens stay within unlimited German inheritance and gift tax for five years after leaving, and §4 AStG can stretch this further for people caught by §2 AStG. If you plan to give away company shares to your kids after moving, the calendar matters.

Common destinations like the UAE (no personal income tax) will usually count as low-tax. Countries with normal progressive tax, like Portugal, usually won’t – unless you use a preferential regime.

Shareholders: exit tax first, flight second

If you hold at least 1% of a corporation (GmbH, AG, UG, or a foreign company) and have been unlimited taxable for at least seven of the last twelve years, leaving Germany can trigger exit tax on the unrealized gain in those shares (§6 AStG). No sale, no cash, still a tax bill.

This is the one topic where timing before the move makes the biggest difference. Full breakdown with numbers: German exit tax explained.

If you run a company, also check where it will be managed from after you leave. A German GmbH run from Dubai raises questions, and so does a Dubai company run from your old German desk: place of management.

Health insurance, pension and social security

Tax is one system. Social security is another, with its own rules.

• Health insurance. Public insurance (GKV) generally ends when you leave Germany for a non-EU country and give up your German residence. Moving within the EU, the EU coordination rules (Regulation 883/2004) decide which country covers you. Private insurers often offer an Anwartschaftsversicherung – a cheap “placeholder” policy that keeps your right to return without new health checks. Worth pricing before you cancel.
• Pension. German pension entitlements you’ve built up don’t disappear when you leave. You can often pay voluntary contributions to the Deutsche Rentenversicherung. Within the EU and with treaty countries, insurance periods can be combined. The pension office can send you an overview (Renteninformation).
• Working inside the EU. Social security generally follows where you work, not where your company is registered. If you work in two EU countries, special rules apply – and an A1 certificate proves which country’s system you belong to.
• Kindergeld. Normally tied to residence or unlimited tax liability in Germany. Expect it to stop after you leave, unless EU coordination rules or your job keeps a claim alive.

Banks, brokers and paperwork

• German bank accounts can usually stay open, but tell the bank your new address and tax residency. Under the Common Reporting Standard (CRS), the bank will then report your account to your new country. Some banks close accounts of non-residents in certain countries, so keep a second account abroad before you rely on it.
• Brokerage accounts are more sensitive: some German brokers don’t serve clients resident outside the EU at all. Check the terms before you move, not when you want to sell.
• Your new tax ID and a residence certificate from your new country (a tax residency certificate, “Ansässigkeitsbescheinigung” in German) are your best proof of the switch.
• Finanzamt: file a final return for the year you leave. In that year you’re unlimited taxable until the move and limited taxable afterwards. Foreign income from the rest of the year can still push up your German rate through the progression clause.

Worked example: two founders, same move

Anna and Ben are both German freelancers earning €180,000 a year. Both move to Cyprus on 1 July 2026, sign a long-term lease in Limassol and deregister in Germany.

Anna’s position is clean. Ben might still win the treaty argument if his life really moved to Cyprus – but he’ll have to prove it year after year, and the flat cost him more in hassle than a nice Airbnb for his visits would have. Our day tracker helps both of them document where they were.

Your 12-month exit timeline