Tax residence in Germany for Indian residents and NRIs

Germany treats you as tax resident if you keep a home there that you can use (Wohnsitz) or stay more than six months in a row — even across two calendar years. India looks only at your days in India in the tax year from 1 April. If both countries treat you as resident, Art. 4(2) of the India–Germany Agreement of 1995 decides, and India gives credit for German tax.

Check your status: India and Germany

Free, no sign-up, about 3 minutes. Conclusion under Indian income-tax law, compared with the law of Germany and the tax treaty.

When Germany treats you as a tax resident

In Germany the dwelling itself is decisive: if you keep a flat or room that you can use at any time, you are resident — regardless of days spent and of where your centre of vital interests is.

The German six months are counted continuously and are not tied to the calendar year: a stay from October to April already creates a habitual abode.

You have a home in Germany — under § 8 AO this is a Wohnsitz (domicile), so under German law you are resident with unlimited tax liability, even if your centre of vital interests is in India.
You stayed in Germany continuously for more than six months for a purpose other than a visit or holiday — under § 9 AO this is a habitual abode from the first day, and you are resident in Germany.

When you are a nonresident

Your stay was only a visit, holiday or medical treatment of up to one year and you have no home in Germany — no habitual abode arises; you are not resident in Germany.
You have no home in Germany and your uninterrupted stay did not exceed six months — you are not resident in Germany. German-source income (in particular wages for work physically performed in Germany) is still subject to limited tax liability there.

Where the rules of Germany clash with Indian tax rules

Collision: a German home makes you German-resident, India counts only days. For Germany a dwelling you can use at any time (Wohnsitz) is enough: you are resident with worldwide tax liability even if your centre of vital interests is in India (BFH, I R 74/16), and no minimum number of days is required (BFH, I R 58/16). India decides residence by days only: 182 days or more in India in the tax year (1 April – 31 March), or 60 days plus 365 days in the four preceding tax years; for an Indian citizen leaving India for employment abroad only the 182-day test applies, and for an Indian citizen or person of Indian origin visiting India the 60 days become 120 days (with Indian income above ₹15 lakh) or do not apply at all (s. 6 of the Income-tax Act, 2025). A home or family in India is not itself a test. Both countries can therefore treat you as resident in the same period — for example in the year you move to a flat in Germany after spending 182 days or more in India. Article 4(2) of the India–Germany Agreement decides: permanent home → centre of vital interests → habitual abode (also where you have a permanent home in neither State) → nationality → mutual agreement. Keep evidence for each step (lease, where your family lives, employment, days).
Collision: six continuous months in Germany vs. India's April–March tax year. Germany counts six months of uninterrupted presence regardless of calendar-year boundaries, and residence then applies from the first day (§ 9 AO). A stay from October to April makes you German-resident although you spent fewer than 183 days in Germany in each calendar year. India counts days in its own tax year (1 April – 31 March), which overlaps two German years; with 60 days in India and 365 days in the four preceding years you can still be resident in India — unless you are an Indian citizen who left India for employment abroad that year, when only the 182-day test applies (s. 6(3)). For part of such a stay you may be resident in both countries; the tie-breaker in Art. 4(2) of the Agreement decides.

What else to know

How India relieves double taxation of income from Germany. If India is your state of residence, it taxes your worldwide income and deducts the German tax on income that Germany may tax under the Agreement — e.g. salary for work in Germany beyond the limits of Art. 15(2) — up to the Indian tax on that income (Art. 23(2) of the Agreement; s. 159 of the Income-tax Act, 2025). Claim the credit with Form No. 44 under rule 76 of the Income-tax Rules, 2026, with proof of the German tax (Lohnsteuerbescheinigung or Steuerbescheid). Germany assesses by calendar year and India by tax year (1 April – 31 March), so German tax for one calendar year usually relates to two Indian tax years. Whether the MLI modifies the Agreement from 2026 is not verified; the MLI does not change the tie-breaker for individuals.
Working in Germany while not German-resident: 183 days in the German calendar year. Even as a non-resident of Germany you owe German tax on wages for work physically performed in Germany (§ 49(1) no. 4(a) EStG), unless all conditions of Art. 15(2) of the India–Germany Agreement are met: no more than 183 days in Germany in the fiscal year concerned — for Germany the calendar year (Art. 3(1)(k)) — an employer that is not resident in Germany, and pay not borne by a permanent establishment or fixed base in Germany. If an Indian employer seconds you and a German group company bears your salary, the exemption does not apply from the first day. The Agreement has no special rule on hiring-out of labour.
Year of moving: Germany splits the year, India does not. In the year you arrive in or leave Germany, Germany taxes worldwide income only for the period of unlimited liability, and foreign income for the rest of the year raises the rate (§ 32b EStG). India has no split year: your status covers the whole tax year from 1 April to 31 March, and the German calendar year cuts across two Indian tax years. Match the periods in both returns so that the same months' income is not left double-taxed.
Students, trainees and visiting teachers from India. Under Art. 20 of the India–Germany Agreement, money a student or business apprentice receives from abroad for maintenance or education is not taxed in Germany, nor is employment income up to DM 7,200 (or its equivalent) per fiscal year if the work relates to the studies or is needed for maintenance — the figure has never been updated in the text. A teacher or researcher invited for no more than two years is exempt in Germany on teaching or research pay in the first year, and in the second year only on pay from outside Germany. A stay of more than six months still makes a student German-resident under § 9 AO.
Social security: India–Germany agreement, detachment up to 4 years. India's social security agreement with Germany has applied since 1 October 2009; according to EPFO an employee detached from India can stay in the Indian system for up to 4 years, with a certificate of coverage from EPFO, and the agreement also provides for totalisation and export of benefits. Social security coverage is decided under this agreement, not the tax treaty, so your tax residence and the system you contribute to may differ.

How dual residence is resolved

If both countries treat you as a resident, Art. 4(2) of the treaty applies: Agreement between the Republic of India and the Federal Republic of Germany for the avoidance of double taxation with respect to taxes on income and capital, signed at Bonn on 19 June 1995 (Notification S.O. 836(E), 29 November 1996). The tests are applied in order — permanent home, centre of vital interests, habitual abode, nationality, and finally mutual agreement between the tax authorities.

Terms you will come across in Germany

Wohnsitz: domicile — a home you keep and can use at any time
gewöhnlicher Aufenthalt: habitual abode — more than six months of continuous stay
unbeschränkte Steuerpflicht: unlimited tax liability on worldwide income (resident)
beschränkte Steuerpflicht: tax only on German-source income (non-resident)
Progressionsvorbehalt: exempt income still raises the tax rate on other income
Finanzamt: local tax office

Questions

Which treaty applies between India and Germany?

The Agreement signed at Bonn on 19 June 1995, in force since 26 October 1996. Dual residence of individuals is resolved by Art. 4(2): permanent home, centre of vital interests, habitual abode, nationality, then mutual agreement.

How many days can I work in Germany for an Indian employer before Germany taxes my salary?

Under Art. 15(2) Germany cannot tax the salary if you are there no more than 183 days in the fiscal year concerned — for Germany the calendar year — and the pay is not borne by a German employer or permanent establishment. A German home or more than six months' stay makes you resident in Germany anyway.

How does India avoid taxing my German income twice?

If India is your state of residence, it deducts the German tax from the Indian tax on that income, up to the Indian tax (Art. 23(2) of the Agreement; s. 159 of the Income-tax Act, 2025). File Form No. 44 under rule 76 with proof of the German tax.

Sources

Legislation and official guidance

§ 1(1) EStG — Individuals with a domicile (Wohnsitz) or habitual abode (gewöhnlicher Aufenthalt) in Germany have unlimited tax liability, i.e. they are taxed on worldwide income.
§ 8 AO — A person has a domicile (Wohnsitz) where they keep a dwelling under circumstances indicating that they will retain and use it.
§ 9 AO — Habitual abode means presence that is not merely temporary. An uninterrupted stay of more than six months is always a habitual abode, from the first day; short interruptions are disregarded. Exception: stays solely for visits, recreation, medical treatment or similar private purposes lasting no longer than one year.
§ 9 sentence 3 AO — The six-month rule does not apply if the stay is solely for a visit, recreation, medical treatment or a similar private purpose and does not exceed one year.
§ 1(3)–(4) EStG — Without a domicile or habitual abode, liability is limited to German-source income (§ 49). On application, a non-resident can be treated as having unlimited liability if at least 90 % of their income is subject to German tax.
§ 49(1) no. 4(a) EStG — Employment income is German-source income if the work is performed or used (verwertet) in Germany.
Income-tax Act, 2025, s. 6(1)–(2) — Residential status is determined for each tax year. An individual is resident in India in a tax year if in India for 182 days or more in that year, or for 60 days or more in that year and 365 days or more in the four years preceding it.
Art. 4(2) India–Germany Agreement (1995) — A dual-resident individual is deemed resident of the State where he has a permanent home available; if in both, where his personal and economic relations are closer (centre of vital interests); if that cannot be determined, or if he has no permanent home available in either State, where he has an habitual abode; if in both or neither, the State of nationality; otherwise the competent authorities settle the question by mutual agreement.
Income-tax Act, 2025, s. 6(3), (6) — The 60-day test does not apply to an Indian citizen who leaves India in the tax year as a member of the crew of an Indian ship or for employment outside India; only the 182-day test applies. Days of crew on a voyage are counted as prescribed.
Art. 23(2) India–Germany Agreement (1995) — India allows as a deduction from the Indian tax on the income of a resident of India an amount equal to the German income tax paid on income which may be taxed in Germany under the Agreement; the deduction shall not exceed the part of the Indian income-tax attributable to that income.
Income-tax Act, 2025, s. 159 — The Central Government may enter into agreements for relief from double taxation and avoidance of double taxation; where an agreement applies, the Act applies only to the extent more beneficial to the assessee (s. 159(4)). A non-resident may claim treaty relief only with a certificate of residence from the other country's government and the prescribed documents and information (s. 159(8)).
Income-tax Rules, 2026, rule 76; Forms No. 44 and 45 — A resident gets credit for foreign tax in the tax year in which the income is taxed in India; credit is the lower of the Indian tax on that income and the foreign tax, per source and per country; not against interest, fees or penalties; disputed foreign tax only after settlement (Form No. 45, within 6 months of the month of settlement). Form No. 44 with a certificate of income and tax and proof of payment, within 12 months from the end of the tax year if the return was filed on time; accountant verification if foreign tax is ₹1,00,000 or more. Conversion at the TT buying rate.
Germany: law of 2026 extending the MLI to further treaties (secondary source: KPMG TaxNewsFlash, April 2026) — The Bundestag passed the bill on 26 March 2026; the expansion covers treaties with significant trading partners and G20 members, India among them. No effective date for individual treaties is given.
Art. 15(2) and Art. 3(1)(k) India–Germany Agreement (1995) — Remuneration of a resident of one State for employment exercised in the other State is taxable only in the first State if the recipient is present in the other State for not more than 183 days in aggregate in the fiscal year concerned, the employer is not a resident of the other State, and the remuneration is not borne by a permanent establishment or fixed base of the employer there. 'Fiscal year' means for German tax the calendar year and for Indian tax the previous year (now the tax year). Art. 15 has no rule on hiring-out of labour.
§ 2(7), § 32b EStG — Income tax is assessed annually. In the year of arrival or departure, worldwide income for the period of unlimited liability and German-source income for the rest of the year are combined; foreign income and treaty-exempt income raise the tax rate (Progressionsvorbehalt).
Art. 20 India–Germany Agreement (1995) — Teachers and researchers visiting at the invitation of the other State or an institution for not more than two years solely to teach or research: remuneration exempt in the host State in the first year; in the second year only remuneration from outside that State. Students, business apprentices and similar persons: remittances from abroad for maintenance or education are exempt, and employment income up to DM 7,200 (or the Indian equivalent) per fiscal year if the work is related to the studies or needed for maintenance.
EPFO — Brochure on International Workers (17.08.2022), table of operating social security agreements — India's operating social security agreements with date of effect, detachment period, totalisation and export of benefits: Germany — 01.10.2009, detachment 4 years; Switzerland — 29.01.2011 (no detachment period stated in the table); Austria — 01.07.2015, detachment 5 years; all three with totalisation and export of benefits. Neither the United States nor Ukraine is among the 20 agreements listed.
EStG
Art. 23(1)–(2) India–Germany Agreement (1995) — Germany: income from India that India may tax under the Agreement is exempt, with the right to take it into account for the rate (para. 1(a)); the dividend exemption applies only to holdings of at least 10% by a German company; for other dividends, interest, royalties and fees for technical services, directors' fees and artistes' income Germany credits the Indian tax (para. 1(b)); business profits and dividends are exempt only if active operations are proved (para. 1(e)). India: deduction from Indian tax equal to the German income tax paid, capped at the Indian tax attributable to the income that may be taxed in Germany (para. 2).
Art. 4(2)(a) India–Germany Agreement — An individual resident of both States is deemed resident of the State in which he has a permanent home available to him; if he has one in both States, of the State with which his personal and economic relations are closer (centre of vital interests).
Art. 4(2)(b) India–Germany Agreement — If the State in which he has his centre of vital interests cannot be determined, or if he has no permanent home available to him in either State, he is deemed resident of the State in which he has an habitual abode.
Art. 4(2)(c)–(d) India–Germany Agreement — If he has an habitual abode in both States or in neither of them, he is deemed resident of the State of which he is a national; if he is a national of both States or of neither, the competent authorities settle the question by mutual agreement.

Case law

Bundesfinanzhof (BFH), 1st Senate, I R 58/16, 24/07/2018 — A Wohnsitz under § 8 AO does not require a minimum number of days actually spent in the dwelling each year; even irregular visits can maintain a domicile. A person can have several domiciles at the same time.
Bundesfinanzhof (BFH), 1st Senate, I R 38/13, 13/11/2013 — A dwelling is any premises suitable for living in, even modest ones; what matters is that the person can use them at any time they wish and keeps them for their own residential use.
Bundesfinanzhof (BFH), 3rd Senate, III R 6/20, 12/11/2020 — Whether the circumstances indicate an intention to retain and use a dwelling is mainly a question of fact in each individual case.
Bundesfinanzhof (BFH), 1st Senate, I R 26/10, 22/06/2011 — Short interruptions count towards the six-month period of presence; there is no fixed limit on days of absence — they are assessed in light of the length of the whole stay.
Bundesfinanzhof (BFH), 1st Senate, I R 74/16, 23/10/2018 — Having a home abroad does not exclude unlimited tax liability in Germany, even where the foreign home is the centre of vital interests. The centre of vital interests matters only when applying a double tax treaty.

Updated 04/11/2026. The result is for information only and is not tax or legal advice. Tax authorities and courts may interpret the rules differently, including because of circumstances not covered here, and the law changes. Consult a qualified adviser before making decisions.

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