Relocation tax guideMoving to Germany: Taxes for Expats 2026
Germany taxes residents on worldwide income at rates up to 45%, plus a solidarity surcharge and - for registered members of a recognised faith - church tax. Investment income is taxed at a flat 26.375%, VAT is 19%, and inheritance tax runs up to 50%. There is no special expat regime; you become resident by having a home in Germany or staying more than six months.
Germany has no headline incentive for new arrivals - residents are taxed on worldwide income like anyone else. The features that catch expats out are different: a flat tax on investment income, and a church tax that is collected automatically once you register a faith. This guide explains how German residency and these taxes work, with the headline rates from the country breakdown.
Germany: key tax rates
| Tax | Rate | Source |
|---|---|---|
| Corporate income tax | ~30%Corporate income tax 15.825% (incl. solidarity surcharge) plus municipal trade tax 8.75-20.3%; combined effective ~30% | PwC Worldwide Tax Summariesas of 2026-01-19 |
| Top personal income tax | 45%Top rate plus solidarity surcharge (higher incomes) and church tax where applicable | PwC Worldwide Tax Summariesas of 2026-01-19 |
| VAT / GST (standard) | 19%Standard VAT rate | PwC Worldwide Tax Summariesas of 2026-01-19 |
| Capital gains | 26.375%Individuals: 25% plus 5.5% solidarity surcharge (plus church tax if applicable) | PwC Worldwide Tax Summariesas of 2026-01-19 |
| Inheritance / wealth tax | Up to 50%Inheritance/gift tax headline rate; varies by relationship and amount | PwC Worldwide Tax Summariesas of 2026-01-19 |
When you become a tax resident
You are generally a German tax resident if you have a dwelling available to you in Germany (a 'domicile') or a habitual abode there - broadly, a continuous stay of more than six months. Residents are taxed on worldwide income; non-residents only on German-source income. Day count matters, but having a home in Germany is decisive on its own.
Source: PwC Worldwide Tax Summaries - Germany (Residence) (as of 2026-06-24).
No special regime - and the church-tax surprise
Germany does not offer an inbound or non-dom concession; once resident, you are taxed on worldwide income at progressive rates up to 45%, with a solidarity surcharge on higher incomes. The often-unexpected item is church tax: if you register as a member of a recognised faith (which many arrivals do without realising the tax consequence), 8-9% of your income tax is collected as church tax. Formally leaving the church stops it.
Self-employed people and businesses also meet municipal trade tax, which is why the combined corporate burden sits near 30%. None of this is a relocation incentive - Germany's appeal is the economy, not the tax regime.
The flat tax on investment income
Most private investment income - interest, dividends, and capital gains on securities - is taxed at a flat 26.375% (25% plus the solidarity surcharge), rather than at your marginal rate, and church tax can apply on top. This 'Abgeltungsteuer' is withheld at source by German banks. Real-estate gains follow separate rules and can be tax-free after a holding period.
Before you move: what to weigh
- Church tax (8-9% of income tax) is triggered by registering a faith; it is avoidable only by formally leaving the church.
- Having a home available in Germany makes you resident on its own, regardless of days spent.
- Investment income is taxed at a flat 26.375%, withheld by German banks.
- US citizens remain taxable by the US on worldwide income; the Germany-US treaty and foreign-tax credits then apply.
Get this right for your situation
Cross-border tax turns on your specific facts. Find a tax professional who works with people moving to Germany.
Does Germany have a special tax regime for expats?
No. Germany has no inbound or non-domicile concession - residents are taxed on worldwide income at rates up to 45% plus a solidarity surcharge. What surprises arrivals instead is the church tax and the flat 26.375% tax on investment income. The draw is the economy, not the tax system.
What is German church tax?
If you register as a member of a recognised faith in Germany, the state collects church tax of 8-9% of your income tax automatically. Many arrivals trigger it unknowingly on registration forms. It applies only to registered members and stops if you formally leave the church.
When are you a German tax resident?
When you have a home available to you in Germany or a habitual abode there - broadly, a continuous stay over six months. Having a German home makes you resident on its own. Residents are taxed on worldwide income; non-residents only on German-source income.
Informational only, not tax advice. Cross-border tax depends on your personal circumstances and changes often; figures are dated to their sources. Confirm your position with a qualified professional before moving or filing.
Important disclaimer
Informational only — not tax advice. This page summarises publicly available information about tax in Germany as of July 2026. Tax laws change, individual circumstances vary, and the application of any rule depends on your specific facts.
TaxProsRated does not provide tax, legal, accounting, or financial advice. Before acting on anything you read here, consult a qualified tax professional licensed in your jurisdiction (in the US: CPA, Enrolled Agent, or attorney; in the UK: CIOT- or ATT-qualified adviser; in Australia: TPB-registered tax agent; elsewhere: a locally-licensed equivalent). TaxProsRated, its operators, and its contributors disclaim all liability for action taken in reliance on this page.