Left Germany with undeclared income? How to put your German taxes right from abroad

What applies to the years you lived in Germany?

Anyone who has a residence or their habitual abode in Germany has unlimited income tax liability (§ 1(1) EStG, Income Tax Act). A person has a residence where they have a home in circumstances which suggest that they will keep and use it (§ 8 AO, Fiscal Code). A person has their habitual abode where they stay in circumstances which show that they are not staying there only temporarily. A continuous stay of more than six months in Germany always counts as habitual abode, from the very first day, and short interruptions are disregarded. This does not apply if the stay is exclusively for visits, recreation, health cures or similar private purposes and lasts no more than one year (§ 9 AO).

The income you earn during this period is subject to German income tax (§ 2(1) EStG), including interest and dividends from a securities account abroad, the salary of a foreign employer and rent from a flat abroad. How Germany avoids double taxation depends on whether a double tax treaty (Doppelbesteuerungsabkommen) exists with the other state and what it provides. For foreign investment income, § 32d(5) EStG governs the crediting of the foreign tax, and under sentence 2 also to the extent that a treaty provides for crediting. How other income is treated without a treaty, for example under § 34c EStG, is a question for advice. The details with and without a treaty are explained in the article Undeclared foreign income from your time in Germany. For the German return this means: taxable investment income without German tax withheld must always be stated (§ 32d(3) EStG), and income that is tax-exempt under a treaty can still raise the tax rate on your other income through the progression clause (Progressionsvorbehalt) (§ 32b(1) sentence 1 no. 3 EStG).

What applies in the year you left?

In the year you left, Germany does not tax foreign income from the period after you left. Through the progression clause, this income can still raise the tax rate (§ 32b(1) sentence 1 no. 2 EStG). German-source income from the period after you left is included in the assessment under unlimited tax liability (§ 2(7) sentence 3 EStG). The increase by the basic tax-free allowance that § 50(1) sentence 2 EStG provides for people with limited tax liability has no place in this assessment. Whether leaving Germany itself triggered tax on shareholdings is covered in the article German exit tax for private individuals.

And if you kept your home in Germany?

Then the first question is whether you gave up your residence at all. Under § 8 AO, what matters is whether you have the home in circumstances which suggest that you will keep and use it. If so, you continue to have unlimited tax liability, even if you live mainly abroad. Whether a double tax treaty then treats you as resident in Germany or in the other state is a separate question to examine.

Which German income is taxable after you leave?

Anyone who has neither a residence nor their habitual abode in Germany has limited tax liability, subject to the special cases in § 1(2) and (3) EStG and in § 1a EStG, if they have German-source income within the meaning of § 49 EStG (§ 1(4) EStG). For former residents, the following cases under § 49(1) EStG are the most likely:

§ 49(1) no. 5 EStG covers interest on a German bank account only in special cases, for example where the claim is secured by German real estate (letter c). A double tax treaty can restrict whether Germany may actually tax the income listed. There is no tax withholding that settles the tax on rent (§ 50(2) sentence 1 EStG, § 50a(7) sentence 4 EStG). Rent is assessed, and a return has to be filed for it (§ 25(1) and (3) EStG).

No basic tax-free allowance: what this means in euros

If you have limited tax liability for the whole year, your taxable income is increased by the basic tax-free allowance before the tax scale is applied. For wages from Germany this only applies to the extent that the allowance exceeds your income from those wages after deduction of certain special expenses (§ 50(1) sentences 2 and 5 EStG). From 2026 the basic tax-free allowance is 12,348 euros (§ 32a(1) sentence 2 no. 1 EStG).

Model case: A single person lives in the US for the whole of 2026 and rents out a flat in Germany. After deducting expenses (Werbungskosten), income of 6,000 euros remains, and there is no other German-source income.

The lump-sum allowance for special expenses and most special expenses (Sonderausgaben) are not available under limited tax liability (§ 50(1) sentence 4 EStG), which is why the income here equals the taxable income. The 1,166 euros are around 19 percent of the rental income. The solidarity surcharge (Solidaritätszuschlag) is not included in this calculation.

On application, you are treated as having unlimited tax liability for your German-source income. The condition is that at least 90 percent of your income in the calendar year is subject to German income tax or that your other income does not exceed the basic tax-free allowance, which may have to be reduced according to conditions in your state of residence. German-source income that may only be taxed at a limited rate under a treaty is treated as not subject to German income tax for this purpose. Income that is not subject to German income tax and is not taxed abroad is disregarded to the extent that comparable income is tax-exempt in Germany. The amount of the other income must be certified by the foreign tax authority (§ 1(3) EStG). That income then raises the tax rate on your German-source income through the progression clause (§ 32b(1) sentence 1 no. 5 EStG). If the person in the model case also had income of 12,000 euros that is taxed in the US and the allowance did not have to be reduced according to conditions there, the tax after such an application would be around 360 euros. If your other income to be taken into account under these rules exceeds the basic tax-free allowance and makes up more than ten percent of your total income, both thresholds are exceeded.

Practice insight from Florian Enders: People who no longer live in Germany and rent out a flat here often assume that low rental income below the subsistence minimum remains tax-free. Many are surprised to hear that this does not apply under limited tax liability.

Florian Enders explains how former residents can declare income from their time in Germany from abroad

How far back can the tax office claim tax for your years in Germany?

Once the assessment period has expired, the tax office may no longer assess or amend a tax (§ 169(1) AO). The period is four years, five to the extent that tax was understated through gross negligence, and ten to the extent that it was evaded (§ 169(2) AO). Where there is an obligation to file, it starts at the end of the year in which the return was filed, at the latest at the end of the third calendar year after the year in which the tax arose (§ 170(2) sentence 1 no. 1 AO).

Model case: A person lived in Germany from 2017 to July 2022 and then moved to the US. For 2017 to 2021 they filed their returns in the following year each time, without the income from their securities account in the US. For 2022 they filed no return, although they were obliged to.

“End of 2026” means at the close of 31 December 2026. For the tax on investment income that comes from states or territories outside the EU and EFTA, for example from the US, and is not reported automatically under treaties within the meaning of § 2(1) AO or agreements based on them, the period starts at the earliest at the end of the year in which the tax office learned of it, and at the latest ten years after the end of the year in which the tax arose (§ 170(6) AO). If this rule already applies in time to the year 2017, the period for that year's income from the US would start at the end of 2027 at the latest. Whether § 170(6) AO applies to the individual year and whether your income is reported automatically are questions to examine.

The end of the period can also be postponed (§ 171 AO). In the case of tax evasion or understatement through gross negligence, it does not end before prosecution of the offence is time-barred (para. 7). If you make a report under § 153, § 371 or § 378(3) AO before the assessment period expires, it does not end before one year after the report is received (para. 9). If a tax audit (Außenprüfung) in Germany is not feasible, other investigations by the tax office can also suspend the expiry, provided it has informed you before the assessment period expires that they are starting (para. 6).

For the limitation of prosecution, § 78(3) no. 4 StGB (Criminal Code) provides, for example, that offences punishable by a maximum term of imprisonment of more than one year up to five years become time-barred after five years. Which limitation period applies in your case to tax evasion, including in particularly serious cases (§ 376 AO), or to understatement of tax through gross negligence (§ 384 AO), is a question to examine. When the limitation period starts for the individual year is a question for advice.

Late return, correction or voluntary disclosure?

Which route fits depends on your situation and on the degree of fault. How the routes connect depending on the degree of fault is covered in more depth in the article Undeclared foreign income from your time in Germany. This article deals with what you need to consider after leaving Germany.

No return filed: The obligation continues. To the extent that the tax office cannot determine the tax base, it estimates it, and the obligation to file a return remains even then (§ 162(1), § 149(1) sentence 4 AO). A late filing surcharge (Verspätungszuschlag) may also be added. It must be imposed if the return was not filed within 14 months after the end of the year, and in the cases of § 149(2) sentence 2 AO not within 19 months (§ 152(2) nos. 1 and 2 AO). For individual years, different periods may apply under Art. 97 § 36 EGAO, the special rules introduced because of the coronavirus pandemic; whether and which apply to your year is a question to examine. The obligation to impose the surcharge does not apply if the tax office extended the deadline, if the tax is assessed at zero euros or less, or if the tax does not exceed the advance payments and tax withheld (§ 152(3) AO). The tax office can then still impose a surcharge at its discretion, unless you show credibly that the delay was excusable; the fault of a representative is attributed to you (§ 152(1) AO). For each month or part of a month of delay, the surcharge is 0.25 percent of the tax assessed less advance payments and tax withheld, at least 25 euros for each month or part of a month, and at most 25,000 euros in total (§ 152(5) and (10) AO).

Error in a return already filed: Anyone who realises after the event, before the assessment period expires, that a return filed by them or on their behalf is incorrect or incomplete and that this may result or has already resulted in tax being understated must report this without delay and make the necessary correction (§ 153(1) AO).

Gross negligence: No fine is imposed to the extent that you correct, complete or supply the information to the tax office before the initiation of criminal or administrative fine proceedings for the offence has been notified to you or your representative. If tax has already been understated, you must also pay the tax understated in your favour within the reasonable period set (§ 378(3) AO).

Intent: A voluntary disclosure can lead to exemption from punishment (§ 371 AO). Grounds for exclusion and consequences in detail are explained in the article Undeclared foreign income from your time in Germany. After leaving Germany, the key point is this: the voluntary disclosure must fully report all tax offences for the type of tax concerned that are not yet time-barred, at least those of the last ten calendar years. For income tax, this also includes years after you left, for example rent from Germany that was intentionally not declared. § 371 AO does not list a residence in Germany among its conditions. Apart from that, the disclosure must not come after a ground for exclusion under § 371(2) sentence 1 nos. 1 and 2 AO, for example after an audit order (Prüfungsanordnung) has been notified, limited to the substantive and temporal scope of the announced tax audit, after the initiation of criminal or administrative fine proceedings has been notified, or if an offence had already been discovered and you knew this or, on a reasonable assessment, had to expect it. Exclusion because of an audit order or because a tax official has appeared for a tax audit does not prevent a correction for the other tax offences of the same type of tax that are not covered by it (§ 371(2) sentence 2 AO). Exemption from punishment also does not apply if more than 25,000 euros were evaded per offence or a particularly serious case under § 370(3) sentence 2 nos. 2 to 6 AO exists. If tax has already been understated, you must pay the taxes evaded in your favour, the interest on evaded tax (Hinterziehungszinsen) and the interest under § 233a AO credited against it within the reasonable period set. If exemption from punishment fails only because of the monetary threshold or such a particularly serious case, prosecution is dropped if taxes and interest are paid within the period set and an additional sum is paid (§ 398a AO).

How do you proceed from abroad?

Dealing with the tax office from abroad has three particular features:

• Which tax office is responsible: If you have neither a residence nor your habitual abode in Germany, the tax office in whose district your assets are located is responsible, and if there are several, the one with the most valuable part. If you have no assets here, it is the tax office in whose district you mainly carried out or exploited your activity. If you had no German-source income within the meaning of § 49 EStG in the year you left, the tax office last responsible before you left is responsible (§ 19(2) AO). For pensions, responsibility may have been transferred by ordinance to a single tax authority (§ 19(6) AO).
• How post reaches you: When an assessment notice (Steuerbescheid) that the tax office sends abroad is deemed to have been notified, and when the period for filing an objection (Einspruch) then ends, is governed by § 122 and § 355 AO; for your case, this is a question to examine. Anyone who lives neither in Germany nor in another EU or EEA state must, if the tax office asks, name within a reasonable period a person in Germany authorised to receive documents. If this is not done, a document is deemed to have been received one month after posting and an electronically transmitted document on the fourth day after it was sent, unless it is established that it did not reach you or reached you later. The tax office must inform you of this legal consequence (§ 123 AO).
• Who can act for you: You can be represented by an authorised representative whose power of attorney covers all procedural acts relating to the administrative proceedings unless it provides otherwise (§ 80(1) AO). If a representative has been appointed, the tax office should deal with them; for the notification of assessments to them, § 80(5) AO refers to § 122(1) sentences 3 and 4 AO.

Interest is added to the tax. On the first assessment, interest is charged on the difference (Unterschiedsbetrag), that is, the tax assessed less creditable tax withheld and the advance payments assessed by the start of the interest period. If an assessment is amended, as when correcting years already assessed, what counts is the difference between the newly assessed and the previously assessed tax, each reduced by creditable tax withheld (§ 233a(1) to (3) and (5) AO). The interest period generally starts 15 months after the end of the tax year, or after 23 months where agricultural and forestry income predominates. For individual years, different start dates may apply under Art. 97 § 36 EGAO, the special rules introduced because of the coronavirus pandemic; whether and which apply to your year is a question to examine. Interest under § 233a AO is 0.15 percent per full month from 1 January 2019, and 0.5 percent for earlier periods (§ 238(1) and (1a) AO). For evaded taxes, interest on evaded tax under § 235 AO is added, against which interest under § 233a AO is credited to the extent provided for in § 235(4) AO (§ 371(3) AO); the start, end and amount of interest on evaded tax in the individual case are a question to examine. If you pay before the assessment and the tax office credits the payment against the tax assessed later, interest on back payments is not assessed, or is waived, to that extent, and the date of each individual payment is what counts (§ 233a(8) in conjunction with (3) sentence 4 AO). Paying early therefore stops interest from running further on the amount paid, but the interest for the period before remains.

Step by step: how to put it right

1. Document your periods of residence: dates of moving in and out, tenancy agreements and deregistration, stays in both states, a home kept in Germany.
2. Collect documents for each year in Germany: account and securities account statements from abroad, tax certificates, foreign returns and assessments with proof of payment, payslips, rental statements, and the German returns and assessments alongside them.
3. Record your ongoing income from Germany: rent, sales, pensions and wages since you left, each with supporting documents.
4. Determine the open years and submit nothing half-done: a voluntary disclosure must be complete, and a late return should also only go out once your case has been analysed.
5. Act promptly: the report under § 153 AO must be made without delay, a ground for exclusion can arise at any time, and the periods for some years will soon expire.
6. Make sure you can be reached: appoint an authorised representative and, if the tax office asks, name a person in Germany authorised to receive documents.
7. Set money aside for tax, interest and any late filing surcharges, because in a voluntary disclosure exemption from punishment depends on payment on time.

To have your case assessed, you can arrange an initial consultation.

Frequently asked questions

Am I still taxable in Germany after I leave?

Yes, on German-source income within the meaning of § 49 EStG, in principle with limited tax liability (§ 1(4) EStG). This is subject to the special cases in § 1(2) and (3) EStG and in § 1a EStG; on application, you can for example be treated as having unlimited tax liability under § 1(3) EStG. You keep unlimited tax liability as long as you have a residence or your habitual abode in Germany (§ 1(1) EStG, § 8 and § 9 AO).

Is my tax return in the US or the UK enough for my years in Germany?

No. For the years in which you had a residence or your habitual abode in Germany, the obligation to file is governed by German law (§ 25(3) EStG, § 56 EStDV). Whether the foreign tax is credited or the income is exempt follows from the treaty and from German law. For investment income, § 32d(5) EStG governs the crediting, also to the extent that a treaty provides for it. How other income is treated without a treaty, for example under § 34c EStG, is a question to examine.

What happens if I do not respond to letters from the tax office?

To the extent that the tax office cannot determine the tax base, it estimates it (§ 162(1) AO), and the obligation to file a return remains (§ 149(1) sentence 4 AO). If you did not name a person authorised to receive documents when asked, letters are deemed to have been received one month after posting and electronic documents on the fourth day after they were sent, unless it is established that they did not reach you or reached you later. The tax office must inform you of this consequence (§ 123 AO).

Sources, assumptions and limits of this article

Assumptions: an individual who had a residence or their habitual abode in Germany in the years concerned and lives abroad today, income tax, 2026 tax scale for the model cases. Open questions to examine: the applicable double tax treaty and residence where there are homes in both states, whether investment income is reported automatically and whether § 170(6) AO applies to the individual year, the degree of fault, the limitation period for prosecution and when it starts, different periods and interest start dates under Art. 97 § 36 EGAO, the start, end and amount of interest on evaded tax, the notification of assessments abroad and the period for objection, the crediting of foreign tax on income other than investment income, the tax office responsible for the individual earlier years. Not covered: extended limited tax liability under § 2 AStG, the special rules of § 1a EStG for nationals of EU and EEA states, exit tax (linked), inheritance and gift tax, solidarity surcharge, social security, church tax, entry, extradition, enforcement abroad and foreign tax law. Case law was not evaluated. Statutory texts: official collection on gesetze-im-internet.de, last checked against the server on 5 November 2026, read on 6 November 2026.

This article provides general information and does not replace advice in an individual case.