Taxation of seamen on German-flagged merchant ships
Many seamen do not know that they can benefit from filing an income tax return in Germany to receive overpaid taxes back. This applies for German as well as for foreign seamen.
The taxation of German-flagged ships distinguishes between
- unlimited tax liable seamen and
- limited tax liable seamen
The kind of tax liability depends on the place of residence or habitual abode.
Unlimited tax liable seamen
German or foreign seamen are unlimited tax liable with their world-wide income when they have a residence or habitual abode in Germany. This tax liability is applicable at all times and is not restricted by Double Tax Treaties.
Limited tax liable seamen
If the seaman neither has a residence nor a habitual abode in Germany, he is just limited tax liable. Generally you have an habitual abode when staying more than 183 days in Germany within 12 months. Seamen staying more than 183 days in foreign territorial waters on German-flagged ships and not being employed more than one year on the German-flagged ship, do not have an habitual abode and are just limited tax liable.
However, seamen being limited tax liable can apply for being treated as unlimited tax liable provided that
- at least 90% of their total income is tax liable in Germany or
- the foreign income is less than 8.354 € (status as of 2015).
The monthly wage tax is calculated according to the expected yearly income. However, most seamen are working less than one year on a ship so that the withhold wage tax is quite high in relation to the actual income. That's why seamen often can benefit from filing a German income tax return because they often can expect a high refund of overpaid wage tax.
Please get in touch with us - we can provide you with a pre-calculation of your possible tax refund and we check whether you are obliged to file a tax return in Germany.