FAQs - Double taxation
I am a Polish citizen. I live and work in Germany. I have received a request from the Polish tax office to declare my foreign income. I have already paid my taxes in Germany. Can two countries request tax declarations from me for the same period and for the same income?
YES. Member States are free to apply tax rules and request tax declarations as they choose – as long as they do not apply these procedures in a discriminatory way. It is unusual, but not unheard of, for countries to require their nationals who are non-resident to declare their income.
Moreover, the fact that you live and work in one country may not necessarily mean that you are resident there under the terms of the tax treaty between that country and your home country/country of citizenship.
Normally, if you live and work in a country that is not your home country for more than 6 months in a year you will most probably be tax-resident there and that country will be able to tax your total income - that is both your salary earned in that country and income you earn elsewhere (both within and outside the EU). However, if you have strong family and economic ties with your home country, you may still be considered tax- resident there– even if you spend less than 6 months a year in that country.
If you spend less than 6 months a year in a country that is not your home country, you will normally remain tax-resident in your home country. In that case, you would probably be subject to tax in the other country only on your salary and other revenue arising in that country and you would be liable to tax on your worldwide income in your home country.
Contact the Polish tax authorities to check which rules apply to you. In any case, if you have moved from one country to another it is always advisable to notify the tax authorities to prevent problems later.
I am Irish and live in Ireland , with irregular professional activity there. I am going to work in Austria as a ski instructor for at least 3 months this year. Where will I pay taxes?
If your employer is resident in Austria, you would normally pay tax in Austria on the income you earn from working there no matter how long you stay there.
If you stay in Austria for less than 6 months, you would probably retain your tax residence in Ireland and therefore also be subject to tax on your world-wide income for the year there, including your income from Austria. However, in such a case, you would probably be able to set the tax you paid in Austria against your Ireland tax.
To be certain, you should check the Ireland-Austria bilateral tax convention.
I am a Finnish pensioner living in Italy. Can Italy tax me on the income from my Finnish pension plan to which I have contributed for over 40 years?
This would depend on the terms of the bilateral tax agreement between Finland and Italy and the precise nature of your income.
Under the standard double taxation agreement, private sector pensions would be taxed only in your country of residence — Italy, in your case. Income from investments in the form of dividends might be taxable in both Finland and Italy, but in that case Italy would normally allow relief from Italian tax on account of the tax paid in Finland.
I am a Swedish pensioner living in Spain. I thought double taxation of income was forbidden in the EU. How come I have to declare income in both countries at the same time (in Spain I have to declare my Swedish pension even though it has already been taxed in Sweden?)
It is up to individual countries to sign agreements banning double taxation. If they do not, EU rules cannot force them to do so. And any country you have a connection to can legally require you to complete tax declarations. However, having to declare the same income in 2 EU countries does not necessarily mean you will pay tax twice. And even if you do have to pay tax twice you may be able to reclaim tax in one of the countries.
Consult the tax convention concluded between Spain and Sweden for more information.
I am Danish. I previously lived and worked in Denmark but after retiring I moved to France. I have bought a house in France where I plan on spending the rest of my life. So far I have been paying income tax on my Danish pension only in France, but I recently heard that the double tax treaty between Denmark and France is no longer in force and I am afraid of receiving a Danish tax bill. Why can the two countries require me to pay tax on the same income?
Unfortunately, the treaty on avoidance of double taxation between Denmark and France is no longer applicable. Taxpayers, such as pensioners, who derive their income from Denmark but are resident in France, are now liable to taxes on their Danish income in both countries.
However, you might be able to get some relief from double taxation under national laws: check with the French tax authorities to see whether you can set any of the tax paid to Denmark against your French tax.
EU countries are not obliged to conclude double taxation treaties to eliminate double taxation, and EU rules cannot force them to do so. But efforts are ongoing to try to reduce tax obstacles to free movement of citizens across borders, including their exposure to double taxation.
I am an Irish citizen living in Canada and I receive a pension from Germany that is taxable in Germany. I am having difficulties in navigating through the complicated German tax rules and cannot find information or tax return forms in English. Can anybody help me?
YES - Information for pensioners residing in foreign countries is usually available through dedicated services in national tax administrations, sometimes in several languages. Find out more in English about German taxation of pensioners living abroad. In addition, websites of consular offices and pension insurance schemes generally provide information in English for pensioners living abroad.
I am a Polish pensioner living in Poland. I recently spent 5 months in Ireland where I rented an apartment, but I never applied for residence there. The Irish tax authorities have now sent me a bill for a local Council tax. I pay income tax on my pension in Poland. Can the Irish authorities also ask me to pay tax when my stay in Ireland was so short?
YES - EU countries are free to apply any tax rules they choose as long as they do not breach EU laws for example by discriminating against non-nationals. The taxes levied by local Councils are taxes based on home rental and are applied to everybody; if you rented an apartment, even for a short time, you may have to pay it.
However, it may be that some or all of the local Councils offer reduced rates or exemptions from local taxes – for instance if your primary residence is elsewhere. You would have to contact the local Council in question to see whether you are eligible for any such tax relief.