Visa holders · From Germany
Rent and dividends keep a German tax bill after moving to the US from Germany: taxes paid there earn a US credit, within limits.
Under Article 18(5) of the US-Germany treaty, only the US taxes a Deutsche Rentenversicherung pension paid to you as a US resident. It counts that pension as it would US Social Security, so at most 85% of it is taxable. If the pension is your only German income, you generally need not file a German return.
Updated · Sources
Germany’s limits for a new US resident
- 15%
- of each German dividend is as much as Germany may keep, under Article 10(2)(b) of the treaty.
- 0%
- is Germany’s tax on interest from an ordinary German bank account once you live in the US (Article 11(1)).
- 5 years
- after leaving, a German national is still within German gift and inheritance tax, or longer with a kept German home.
A non-resident generally gets no tax-free allowance against German rent.
Which German rules apply as you leave?
You keep a flat in Germany
A flat you keep for your own use can keep your German tax residence alive, even once you deregister (Abmeldung). When the US treats you as resident as well, the treaty’s tie-breaker asks first where your permanent home is.
You move out in the middle of a year
One German return covers the whole calendar year of your move. Germany does not tax US pay you earn after leaving. Its progression rule (EStG § 32b) still counts that pay to set the rate on your German income.
You hold 1% or more of a company
Germany’s exit tax, the Wegzugsbesteuerung, treats any stake of 1% or more in a company as sold at fair value when you leave. A stake counts if it reached 1% at any time in the last five years, and a US startup stake generally counts too. The tax applies only if you were taxed as a German resident in at least 7 of the last 12 years.
Your units in one fund cost €500,000 or more
For departures since 2025, the exit tax also reaches fund units you hold privately. It applies when your units in one fund cost €500,000 or more. It also applies if you held at least 1% of a fund’s units at any time in the last five years.
Your RSUs or options were granted in Germany
Germany generally taxes the part of an award earned on German workdays, even if it vests after you leave. The US taxes the whole award and credits the German tax.
Keeping a German flat may not avoid the exit tax if the treaty’s tie-breaker treats you as a US resident. You can apply to pay the exit tax in seven equal yearly instalments, with no interest, usually against security. If your absence is temporary, the tax lapses when you return within seven years still holding the shares. The tax office can extend that window by up to five years.
A GmbH stake worth €1.1 million draws €284,850 of German exit tax, and the €1.1 million can become your US basis.
You get that US basis only by electing it under Article 13(6) of the treaty, and US citizens can elect it too.
Gain Germany counts as you leave
€1,000,000
It is the €1.1 million value less the €100,000 you paid.
Part of the gain Germany taxes
€600,000
Germany exempts 40% of a gain on shares.
Exit tax
€284,850
At 45%, the tax on €600,000 is €270,000, and the 5.5% solidarity surcharge adds €14,850.
US gain if you later sell at €1.1 million
€1,000,000
Without the election, the US counts from your €100,000 cost.
The same sale, with the Article 13(6) election
€0
Your US basis starts at the €1.1 million Germany used.
The example applies 2026 rates: 45% income tax from €277,826 of a single filer’s taxable income, and the 5.5% solidarity surcharge. It assumes your other income already reaches that band, and leaves out church tax. Under German law, a funding round with outside investors in the past year can set the value of unlisted shares. The US measures its gain in dollars, while this example stays in euros. The treaty does not say how the election works if you pay in instalments.
The US-Germany tax treaty shelters a Betriebsrente from US tax until payout, but may not protect a Riester contract.
Article 18A, the treaty’s pension plan article, names German company plans under the Betriebsrentengesetz and no other German product.
| Betriebsrente | Riester contract | |
|---|---|---|
| US tax on growth in the plan | Deferred until payout Article 18A(1) | Treaty deferral unclear The IRS has not said how a Riester contract is taxed |
| Funds held in the plan | No Form 8621 The treaty pension fund exception | Form 8621 may be due |
| Payouts once you live in the US | US tax only Lump sums as well | US tax only German allowances and tax savings must be repaid if you live outside the EU or EEA when payouts start |
| Contributions from your US pay | Deductible within US limits If you are on a visa and paid in before your US job | No treaty deduction |
German providers leave both out of their FATCA reporting. If you must file Form 8938, it still has to include them. A Rürup contract (Basisrente) is not named in the treaty either, so its deferral is unclear too.
Where do German savings run into US rules?
Keeping your ETF savings plan
For a US resident, German funds and UCITS ETFs usually count as PFICs, and each generally needs its own Form 8621 every year. With no election, the part of a gain allocated to your earlier US-resident years is taxed at the highest US rate, plus interest. If you sell a fund before your US residency starts, only Germany taxes the gain.
Leaving the German dividend refund unclaimed
Tax withheld above the treaty rate earns no US credit (Treas. Reg. § 1.901-2(e)(5)), so claim it back from Germany. German payers withhold 26.375% from dividends, and the Federal Central Tax Office (BZSt) refunds the excess only on a claim. The claim is due within four years after the year of payment and may need Form 6166, the IRS certificate of US residency.
Selling German property after ten years
Germany stops taxing a private sale of German property once you have owned it ten years. The US still taxes your gain, measured in dollars from your cost, with no German tax to credit. A former main home may qualify for the US home sale exclusion.
Assuming your German pension years are lost
A German national cannot get German pension contributions back before the standard retirement age, 67 if born from 1964. With at least 18 months of German coverage, the US-Germany totalization agreement counts your US work toward the five years a German pension needs. On a temporary posting, a German employer can keep you in German social security with certificate D/USA 101 from your health insurance fund.
Leaving a Bausparvertrag off the FBAR
A Bausparvertrag (building savings contract) and a cash-value life policy count toward the FBAR. Your Girokonto (current account), Tagesgeld (instant-access savings) and Depot (brokerage account) count as well. A Riester contract may count too.
We claim the exit tax step-up and apply the treaty’s pension rules on your US returns.
Valim prepares US returns, federal and state, for newcomers from Germany, and leaves the German return to your Steuerberater.
- We start with the year you arrive. When you sell shares Germany taxed as you left, we claim the Article 13(6) step-up.
- We report your Deutsche Rentenversicherung pension as US Social Security, as the treaty requires, and keep a Betriebsrente’s growth out of your US income. German tax on your rent, or on the German-workday part of your RSUs, becomes a credit on Form 1116.
- We file the FBAR, Form 8938 and each Form 8621 a fund calls for, plus Form 5471 for a German company where required. We report gifts or an inheritance from Germany on Form 3520 in any year they pass $100,000. In the instant quote, each German account and fund has its own price, as does each company you own more than 20% of.
- Before you arrive, we compare the German tax on selling your ETFs now with the PFIC tax on selling them later. We also calculate the quarterly tax due on German rent or a German pension.
- We take on any IRS or state notice about a return we prepared, within the fee, such as a query about your Riester payout.
- Individual return
- from $195
- Business return
- from $495
We quote a flat fee before work starts. We do not bill hourly.
The tax questions a move from Germany raises.
Do I have to pay US taxes if I live in Germany?
Yes, if you are a US citizen or hold a green card, even while living in Germany. The US taxes both on worldwide income, and a green card keeps that duty until it is formally abandoned or rescinded. A green card holder who is German-resident under the treaty’s tie-breaker may file as a nonresident, but this can count as expatriating. Under Article 23 of the treaty, the US gives a credit for German income tax on income both countries tax. A German national who held a US visa and has moved back owes US tax only on US-source income.
Is there a double tax treaty between Germany and the US?
Yes, the US-Germany tax treaty signed at Bonn on August 29, 1989, has been in force since August 21, 1991. A protocol signed in Berlin on June 1, 2006, applies to withholding taxes from 2007 and to other taxes from 2008. Its saving clause binds only the US, which keeps its full right to tax citizens and residents, except under the articles the clause itself lists. A separate estate and gift tax treaty has been in force since June 27, 1986.
Who pays 45% tax in Germany?
In 2026, a single person pays Germany’s 45% rate on taxable income from €277,826, and a married couple filing jointly from €555,652. The 5.5% solidarity surcharge comes on top at those incomes, for a top rate of 47.475% before church tax. Once you have left, Germany applies its rates only to income it may still tax, such as German rent. A cabinet draft of September 2, 2026, would start the 45% rate at €250,000. It would also add a 47% rate from €280,000, but it is not yet law.
Can German inheritance tax still apply after I move to the US?
Yes. Germany taxes a gift or inheritance from a giver living there, above €400,000 per parent and child every ten years. Close family (class I) pays 7% to 30% above that allowance. A German national also stays in scope for five years after leaving, or longer while keeping a German home. The US does not tax what you receive. Gifts or bequests over $100,000 a year from a nonresident alien or a foreign estate still go on Form 3520.
Sources
- US-Germany income tax convention (1989)
- Protocol to the US-Germany convention (2006)
- Treasury, Technical explanation of the 2006 protocol
- US Department of State, Treaties in Force (2025)
- Germany, AStG § 6, Besteuerung des Vermögenszuwachses (exit tax on shareholdings)
- Germany, EStG § 17, Veräußerung von Anteilen an Kapitalgesellschaften (holdings of 1% or more)
- Germany, EStG § 3 (tax-free income, including 40% of a gain on shares)
- Germany, BewG § 11, Wertpapiere und Anteile (valuation of unlisted shares)
- Germany, InvStG § 19, Gewinne aus der Veräußerung von Investmentanteilen (gains on fund units)
- Germany, EStG § 32a, Einkommensteuertarif (income tax rates)
- Germany, SolZG § 4, Zuschlagsatz (the 5.5% solidarity surcharge)
- Germany, SolZG § 3, Bemessungsgrundlage und zeitliche Anwendung (the surcharge on withheld tax)
- Germany, EStG § 43a, Bemessung der Kapitalertragsteuer (25% withheld on dividends)
- Germany, EStG § 50c, Entlastung vom Steuerabzug in bestimmten Fällen (refund of withholding tax by the BZSt)
- Germany, EStG § 50, Sondervorschriften für beschränkt Steuerpflichtige (no tax-free allowance for non-residents)
- Germany, EStG § 32b, Progressionsvorbehalt (the progression rule)
- Germany, AO § 8, Wohnsitz (German residence)
- Germany, BMG § 17, Anmeldung, Abmeldung (deregistration)
- Germany, BMF letter of December 12, 2023, on wages under tax treaties (stock options and RSUs)
- Germany, EStG § 23, Private Veräußerungsgeschäfte (the ten-year rule on property)
- Germany, EStG § 95, Sonderfälle der Rückzahlung (Riester repayment)
- Germany, ErbStG § 2, Persönliche Steuerpflicht (who gift and inheritance tax covers)
- Germany, ErbStG § 16, Freibeträge (gift and inheritance tax allowances)
- Germany, ErbStG § 19, Steuersätze (gift and inheritance tax rates)
- Germany, SGB VI § 35, Regelaltersrente (standard retirement age)
- Germany, SGB VI § 235, Regelaltersrente (retirement age for people born before 1964)
- Germany, SGB VI § 50, Wartezeiten (five years of coverage)
- Germany, SGB VI § 210, Beitragserstattung (refund of contributions)
- German Missions in the United States, Steuerliche Behandlung von Renten (tax treatment of pensions)
- US-Germany FATCA agreement (2013)
- Social Security Administration, Totalization Agreement with Germany
- IRS, Publication 915, Social Security and Equivalent Railroad Retirement Benefits
- 26 C.F.R. § 1.901-2, Income, war profits, or excess profits tax paid or accrued
- IRS, Form 6166, Certification of U.S. Tax Residency
- 26 U.S.C. § 1012, Basis of property: cost
- 26 U.S.C. § 121, Exclusion of gain from sale of principal residence
- 26 U.S.C. § 7701(b), Definition of resident alien (treaty residence of a green card holder)
- 26 U.S.C. § 1297, Passive foreign investment company
- 26 U.S.C. § 1291, Interest on tax deferral
- 26 C.F.R. § 1.1298-1, Section 1298(f) annual reporting for PFIC shareholders (Form 8621)
- 31 C.F.R. § 1010.350, Reports of foreign financial accounts
- IRS, Instructions for Form 8938
- IRS, Instructions for Form 3520 (Rev. December 2025)
- 26 U.S.C. § 102, Gifts and inheritances
Reviewed and updated October 2026. General information, not advice for your situation.