I am currently living in the US, and planning on moving to Germany soon for personal reasons. I am currently happily working remotely as a contractor for an American company. What does this mean for me in terms of taxes health insurance and banking. I am currently being paid to an American bank which has partners in Germany, so I am unsure if I even need a German bank account. Since I am being paid hourly based on reported hours, and started recently I am unsure as to what I could expect my annual income to be.

  • 1
    What is your citizenship?
    – ouflak
    Jan 21 '20 at 7:49
  • Will you be an employee or a contractor? Jan 21 '20 at 11:15
  • I am both a German and American Citizen. I am a 1099 contractor.
    – user19527
    Jan 21 '20 at 12:11
  • Are you a 1099 contractor or a W-2 contractor?
    – Kyralessa
    Jan 23 '20 at 12:05
  • I am a 1099 contractor
    – user19527
    Jan 24 '20 at 0:58

If you are resident in Germany, then Germany expects you to pay tax on your entire worldwide income. It does not matter where the work was performed, or where you are paid to/from

You should not have to pay tax on this due to the double taxation agreement between Germany and the USA, but you will need to study this in detail to determine in detail how to file to ensure this. As a US citizen you will still need to a file a US tax return.

Normally you will also need to make social security contributions in Germany based on your income.
If you are however a freelancer then you may be exempt from these. But in Germany the rules for being a freelancer are strict and you must not earn more than 80% of your income from a single source (otherwise you will have to anyway pay the social security contributions).

You will also need to have health insurance, as this is mandatory for living in Germany. If you have lived in Germany before then you can get accepted back into your previous health insurance, otherwise you will need to find one, and this might be expensive.

Because of this, and the practicalities of living in Germany, you will need to have a German bank account. Otherwise you won't be able to pay any of your bills!

  • First sentence is absolutely completely wrong. Germany expects you to tell them about all your income worldwide to calculate your tax rate, then they apply that tax rate to your German income. So if you make $50,000 in the USA and $50,000 in Germany, you pay the percentage for someone making $100,000, but only on your $50,000 German income.
    – gnasher729
    Jan 22 '20 at 20:23
  • 2
    @gnasher729 No. That's wrong. Simple example: you make 100.000$ from the US while physically in Germany. You pay taxes on 100.000$. You can deduct taxes already paid on that money in the US, but even with zero native German income, you pay taxes in Germany.
    – nvoigt
    Jan 23 '20 at 5:22

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