Tax residence in Germany for Pakistani taxpayers

Germany treats you as resident if you keep a home there that you can use at any time (Wohnsitz) — whatever the number of days — or after more than six months of uninterrupted stay. Pakistan may still treat you as resident under s. 82 of the Income Tax Ordinance, 2001, especially as a citizen; the Pakistan–Germany Agreement of 1994 decides dual residence and relieves double tax.

Check your status: Pakistan and Germany

Free, no sign-up, about 3 minutes. Conclusion under Pakistan's Income Tax Ordinance, 2001, 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 Pakistan.
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 Pakistani tax rules

Collision: a German home makes you German-resident while Pakistan may still treat you as resident. 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 Pakistan (BFH, I R 74/16), and no minimum number of days is required (BFH, I R 58/16). Pakistan's own test (s. 82 of the Income Tax Ordinance, 2001) counts days in its tax year, 1 July – 30 June: 183 days or more makes you resident; a Pakistani citizen with fewer days stays resident unless he or she was present in one other country for more than 182 days and is a resident taxpayer there (s. 82(d)). A home in Germany alone therefore does not end Pakistani residence. If both countries treat you as resident, Art. 4(2) of the Pakistan–Germany Agreement decides: permanent home → centre of vital interests → habitual abode (also used if you have a permanent home in neither country) → nationality → mutual agreement.
Pakistani citizen living in Germany: when Pakistan lets go. As a Pakistani citizen you stop being resident in Pakistan only if, in the Pakistani tax year (1 July – 30 June), you spent fewer than 183 days in Pakistan, more than 182 days in one other country and are a resident taxpayer of that country (s. 82(d)). Germany can make you resident earlier — with a home, or after six months of uninterrupted stay — so in the first year in Germany you are often resident in both countries and the tie-breaker of Art. 4(2) applies. Germany assesses per calendar year, Pakistan per 1 July – 30 June, so keep a day-by-day travel record and a German certificate of residence (Ansässigkeitsbescheinigung) for each year; the FBR may question a claim of non-residence.
Collision: six continuous months in Germany vs. Pakistan's 1 July – 30 June 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 therefore makes you German-resident although you spent fewer than 183 days in Germany in each calendar year. Pakistan counts its own tax year (1 July – 30 June): a Pakistani citizen who was not in Germany for more than 182 days in that year stays resident in Pakistan (s. 82(d)). Expect to be resident in both countries for part of such a stay and check the treaty tie-breaker.

What else to know

Year of moving: Germany splits the year, Pakistan 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). Pakistan has no split year: residence is fixed for the whole tax year (1 July – 30 June). A Pakistani citizen who leaves Pakistan during a tax year and stays abroad for the rest of it is exempt in Pakistan on salary earned abroad in that year (s. 51(2)); a citizen returning after four non-resident years is exempt on foreign-source income in the year of return and the next year (s. 51(1)). The two tax years overlap differently, so match the months when claiming credits.
Working in Germany while not German-resident. 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 Pakistan–Germany Agreement are met: no more than 183 days in Germany «during the relevant tax year», an employer that is not resident in Germany, and pay not borne by a German permanent establishment or fixed base. The Agreement does not define the tax year; Germany assesses income per calendar year.
How double tax is relieved between Germany and Pakistan. If you remain resident in Pakistan (or the tie-breaker assigns you to Pakistan), Pakistan credits German tax on German-source income, up to the Pakistani tax on that income (Art. 22(2); s. 103). Salary for work in Germany on which German wage tax was withheld and paid is exempt in Pakistan altogether (s. 102). If you are resident in Germany, Germany exempts most income Pakistan may tax — including salary for work in Pakistan — with progression, and credits Pakistani tax on dividends, interest, royalties and fees for technical services (Art. 22(1)).
Pakistani government employees posted to Germany. An employee or official of the Federal or a Provincial Government of Pakistan posted abroad stays resident in Pakistan (s. 82(c)). Under Art. 19 of the Agreement, government pay is taxable only in Pakistan, unless you work in Germany and are German-resident and either a German national or did not move to Germany solely for the job.
No Germany–Pakistan social security agreement. Germany has no social security agreement with Pakistan, so German contributions on work in Germany are due under German law and there is no certificate of coverage to exempt a posted worker. Contributions are outside the income tax treaty.
A revised Pakistan–Germany treaty has been negotiated. A draft of a revised Pakistan–Germany double tax convention was initialled in Islamabad on 22 September 2023. We found no evidence that it has been signed in final form or entered into force; until it does, the Agreement of 14 July 1994 applies. Check the BMF list of treaties before relying on either text.

How dual residence is resolved

If both countries treat you as a resident, Art. 4(2) of the treaty applies: Agreement between the Federal Republic of Germany and the Islamic Republic of Pakistan for the avoidance of double taxation with respect to taxes on income, signed at Islamabad on 14 July 1994 (with Protocol; BGBl. 1995 II S. 836). 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 dwelling you keep and can use at any time, regardless of days spent there
gewöhnlicher Aufenthalt: habitual abode — more than six months of uninterrupted stay, counted across calendar years
unbeschränkte Steuerpflicht: unlimited tax liability on worldwide income (resident)
Progressionsvorbehalt: exempt foreign income still raises the German tax rate on other income
Ansässigkeitsbescheinigung: certificate of German tax residence, used to prove residence to the FBR
Finanzamt: local tax office

Questions

Which treaty applies between Pakistan and Germany?

The Agreement signed at Islamabad on 14 July 1994, in force since 30 December 1995. A revised convention was initialled in 2023, but we found no evidence that it is in force. The tie-breaker in Art. 4(2) runs: permanent home, centre of vital interests, habitual abode, nationality, mutual agreement.

I am a Pakistani citizen working in Germany — am I still resident in Pakistan?

Under s. 82(d) a citizen stays resident unless, in the Pakistani tax year (1 July – 30 June), he or she was in another single country for more than 182 days and is a resident taxpayer there. If both countries treat you as resident, the treaty tie-breaker decides.

How is double tax relieved?

If you are resident in Pakistan, Pakistan credits German tax (Art. 22(2), s. 103), and salary taxed in Germany through wage withholding is exempt in Pakistan (s. 102). If you are resident in Germany, Germany exempts most Pakistan-taxable income with progression and credits Pakistani tax on dividends, interest, royalties and technical fees.

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 Ordinance, 2001, s. 82(d) (inserted by the Finance Act, 2022; consolidated text amended up to 30.06.2026 listed by FBR) — A citizen of Pakistan is also a resident individual if he or she is not present in any other country for more than 182 days during the tax year, or is not a resident taxpayer of any other country. Applies from tax year 2023.
Art. 4(2) Pakistan–Germany Agreement (1994) — A person resident in both States 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, the State of his habitual abode; then nationality; if a national of both or neither, the competent authorities settle the question by mutual agreement.
§ 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).
Income Tax Ordinance, 2001, s. 51 — (1) A citizen who becomes resident in a tax year after being non-resident in the four preceding tax years: foreign-source income is exempt in that tax year and the following one. (2) A citizen who leaves Pakistan during a tax year and remains abroad for the rest of it: salary earned outside Pakistan in that year is exempt.
Art. 15(2) Pakistan–Germany Agreement (1994) — Salary for work done in the other State is taxable only in the State of residence if the employee is present in the other State for not more than 183 days in total «during the relevant tax year» (Steuerjahr), the employer is not resident in the other State, and the pay is not borne by a permanent establishment or fixed base of the employer there. The Agreement does not define «tax year»; under Art. 3(2) a term not defined there has the meaning it has under the law of the State applying the Agreement.
Art. 22 Pakistan–Germany Agreement (1994) — Germany (para. 1): income from Pakistan that Pakistan may tax under the Agreement is exempt from German tax, but taken into account for the rate; dividends (except qualifying company holdings of at least 20%), interest, royalties and fees for technical services, gains under Art. 13(4)–(5), directors' fees (Art. 16) and artistes' and athletes' income (Art. 17) get a credit for Pakistani tax instead. Pakistan (para. 2): German tax on German-source income is credited against Pakistani tax, limited to the Pakistani tax attributable to that income.
Income Tax Ordinance, 2001, s. 103 — A resident taxpayer gets a credit for foreign income tax on foreign-source income equal to the lesser of the foreign tax paid and the Pakistan tax on that income (average Pakistani rate × net foreign-source income), computed separately for each head of income; unused credit is not refunded, carried back or forward; the foreign tax must be paid within two years after the end of the tax year.
Income Tax Ordinance, 2001, s. 102 — Foreign-source salary received by a resident individual is exempt if the individual has paid foreign income tax on it; tax is treated as paid if it was withheld by the employer and paid to the revenue authority of the country where the employment was exercised.
Income Tax Ordinance, 2001, s. 82(c) — An individual is a resident individual for a tax year if he or she is an employee or official of the Federal Government or a Provincial Government posted abroad in the tax year — regardless of days in Pakistan.
Art. 19 Pakistan–Germany Agreement (1994) — Remuneration, including pensions, paid by a Contracting State or its political subdivisions for services rendered to that State is taxable only in that State, unless the services are rendered in the other State and the recipient is resident there and either is not a national of the paying State or did not become resident solely to render the services.
Deutsche Rentenversicherung — Germany's social security agreements — Bilateral social security agreements apply with 21 states (Albania, Australia, Bosnia and Herzegovina, Brazil, Chile, India, Israel, Japan, Canada/Quebec, Kosovo, Morocco, Moldova, Montenegro, North Macedonia, Philippines, Serbia, South Korea, Tunisia, Turkey, Uruguay, USA) plus a 2002 secondment agreement with China; Pakistan is not listed (checked 30 Oct 2026).
ProPakistani — Pakistan and Germany sign convention for elimination of double taxation (26 Sep 2023) — FBR: the first draft of the revised agreement was initialled by the heads of delegation in Islamabad on 22 September 2023; the 1994 agreement needs revision.
EStG

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. The FBR, other tax authorities and courts may interpret the rules differently, including because of circumstances not covered here, and the law changes with each Finance Act. Consult a qualified adviser before making decisions.

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