DoubleTaxationUnited States – Germany tax treaty: residence, 183 days, rates
Convention between the United States of America and the Federal Republic of Germany for the avoidance of double taxation … with respect to taxes on income and capital (signed 29 August 1989), as amended by the Protocol of 1 June 2006
- Signed: 1989-08-29
- In force since: 1991-08-21
- Official text
If both countries treat you as resident
- Germany treats a U.S. citizen or green-card holder as a resident of the United States only if that person has a substantial presence, permanent home or habitual abode in the United States. Protocol to the U.S.–Germany Convention, para. 2(a) (with reference to Art. 4(1); text of the 2006 Protocol, Art. XVI)
- Germany treats a U.S. citizen or green-card holder as a U.S. resident only if such person has a substantial presence (see section 7701(b)(3)), permanent home, or habitual abode in the United States — i.e. a reasonably strong economic nexus with the United States is required. Technical Explanation to the 2006 Protocol, Art. II
- A dual-resident individual is deemed to be a resident of the State in which he has a permanent home available to him; if he has a permanent home in both States, of the State with which his personal and economic relations are closer (centre of vital interests). Art. 4(2)(a) of the Convention
- If the State in which he has his centre of vital interests cannot be determined, he is deemed to be a resident of the State in which he has an habitual abode. This step also applies if you have no permanent home in either State. Art. 4(2)(b) of the Convention
- If he has an habitual abode in both States or in neither, he is deemed resident of the State of which he is a national (c); if he is a national of both States or of neither, the competent authorities settle the question by mutual agreement (d). Art. 4(2)(c), (d) of the Convention
Income: who taxes it
| Income | Treaty rule | Article |
|---|---|---|
| Salary (employment) | The country where the work is done may tax it. Exempt if all apply: no more than 183 days in the calendar year; the employer is not resident there; the pay is not borne by its permanent establishment there. | Art. 15(2) |
| Self-employment, business, services | Country of residence; the other country only taxes profits of a permanent establishment (fixed base) there. | Art. 7 |
| Pension | Only the country of residence. | Art. 18(1) |
| State pension (social security) | Only the country of residence. | Art. 18(1) |
| Government service | Usually only the paying country; exception: service in the other country by its national. | Art. 19 |
| Government service pension | Usually only the paying country; exception: service in the other country by its national. | Art. 19 |
| Rent from real estate | The country where the property is located may tax; the country of residence relieves double taxation. | Art. 6(1) |
| Dividends | Source country: at most 15%; the country of residence relieves double taxation. Other rates or exemptions apply in some cases (see the article). | Art. 10(2)(b) |
| Interest (deposits, bonds, loans) | Only the country of residence. | Art. 11(1) |
| Royalties (copyright, licences) | Only the country of residence. | Art. 12(1) |
| Sale of property or shares | Real estate: the country where it is located may tax. Shares of companies deriving their value mainly (over 50%) from real estate: the same. Other property, including shares: only the country of residence. | Art. 13 |
| Other income | Only the country of residence. | Art. 21(1) |
How double taxation is relieved
- Germany: exemption: the income is not taxed but counts towards the rate on other income (credit for dividends, gains on sale, director’s fees, performance income) Art. 23(3)
- United States: credit for the tax paid in the source country, up to the country’s own tax on that income Art. 23(1)
Data checked: 2026-11-10. A short summary for individuals; the full conditions, exceptions and protocols are in the treaty text. General information, not legal advice.