Leaving Germany? See How Much You'd Keep

Annual Savings by Destination

Estimated additional take-home pay compared to staying in Germany, based on €200,000 annual income.

The German Tax System: Einkommensteuer and Beyond

Germany levies income tax (Einkommensteuer) on a progressive scale from 14% to 45%. The top rate of 45% (Reichensteuer) kicks in at taxable income above €277,826. For most high earners, the 42% bracket starting at €66,761 is the relevant rate.

On top of the base income tax, the solidarity surcharge (Solidaritätszuschlag) adds 5.5% of your income tax liability. While a 2021 reform exempted lower earners, those paying significant income tax still face the full surcharge. For someone in the 42% bracket, this adds roughly 2.3 percentage points to the effective rate.

Church tax (Kirchensteuer) applies to registered members of recognised religious communities. In most German states, it is 8% of income tax (9% in Bavaria and Baden-Württemberg). Combined with the solidarity surcharge, a church-tax-paying top-rate earner faces an effective marginal rate of approximately 47.5%.

How to Deregister: The Abmeldung Process

When leaving Germany, you must complete an Abmeldung (deregistration) at your local Bürgeramt or Einwohnermeldeamt. Under the Bundesmeldegesetz, you are required to deregister within two weeks of moving out if you are not moving to another address within Germany.

You will need to present an Abmeldeformular (deregistration form) and your identification document. After processing, you receive an Abmeldebescheinigung (deregistration certificate). This document is essential: banks, insurance companies, and the Finanzamt will use it to confirm your departure date and update your tax status.

Failing to deregister can mean German authorities continue to treat you as a resident, potentially resulting in ongoing tax obligations and complications with German social insurance contributions.

Wegzugsbesteuerung: Germany's Exit Tax on Shares

Germany's exit tax (Wegzugsbesteuerung) under Section 6 AStG targets individuals who hold a substantial interest of 1% or more in a corporation. If you have been a German tax resident for at least seven of the last twelve years, your unrealised capital gains on those shares are deemed realised upon departure.

The deemed disposal means you must pay tax on the gain as if you had sold your shares at fair market value on the date of departure. For moves within the EU or EEA, an interest-free deferral is generally available. For moves outside the EU, the tax is typically due immediately, though instalment arrangements may be negotiated.

This provision primarily affects founders, business owners, and angel investors with significant equity positions. Careful planning of departure timing and share valuations is essential to minimise the impact.

Why Germans Are Leaving

Germany’s combined tax and social contribution burden is among the highest in the OECD. For a single earner without children, the total tax wedge on labour income exceeds 47%, according to OECD data. When social security contributions (approximately 20% employee share for pension, health, unemployment, and long-term care insurance) are factored in, the all-in burden on gross compensation can exceed 50%.

The growth of remote work, particularly in tech, consulting, and creative sectors, has made it feasible for German professionals to relocate to lower-tax jurisdictions while maintaining their client base and income levels. Countries offering territorial taxation, flat tax rates, or zero income tax provide dramatically better take-home pay for the same gross earnings.

Frequently Asked Questions

How do I become a non-resident for German tax purposes?

You must give up your German residence (Wohnsitz) and habitual abode (gewöhnlicher Aufenthalt). This means terminating your lease or selling your property and not maintaining a dwelling available for your use. You must also avoid spending more than six consecutive months in Germany. Once these conditions are met, you are only subject to limited tax liability on German-sourced income.

What is the Abmeldung and why do I need it?

The Abmeldung is the formal deregistration from Germany’s residents’ registry. It must be completed within two weeks of moving out. The resulting Abmeldebescheinigung serves as official proof of your departure date and is required by banks, the Finanzamt, and insurers to update your status.

Does Germany have an exit tax?

Yes. The Wegzugsbesteuerung under Section 6 AStG applies if you hold 1% or more of a corporation and have been resident for at least seven of the last twelve years. Unrealised gains are deemed realised at departure. EU/EEA moves may qualify for deferral; non-EU moves generally trigger immediate taxation.

How do double tax treaties protect me after leaving?

Germany has over 90 double tax treaties that allocate taxing rights between countries. Once non-resident, the treaty with your new country determines how employment income, dividends, interest, and royalties are taxed. Most treaties include tie-breaker provisions to resolve dual-residency disputes based on your permanent home, centre of vital interests, and habitual abode.