Digital nomads and the German tax office: why it does not forget you

Does the tax office forget you when you leave Germany?

Laptop shut, suitcase open, off to Bali: that is how many people picture the start of life as a digital nomad. And yes, working as a location-independent freelancer or remote worker can be great. But one companion travels with you, whether you like it or not: the German tax office (Finanzamt).

Millions work this way: according to MBO Partners, around 18.1 million people in the United States alone described themselves as digital nomads in 2024. A common problem: not deregistering properly, or not knowing what to expect on the tax side.

Does the 183-day rule protect you?

You have probably heard it: "If you spend fewer than 183 days in a country, you do not pay tax there." That is only half true.

The 183-day rule comes from double taxation agreements (Doppelbesteuerungsabkommen, DTAs). It decides which country may tax income from employment. It applies:

• only to employment (that is, to employees)
• only if the employer is not based in the country where you work
• and only within the framework of the DTA in question

For self-employed people and freelancers, the 183-day rule does not apply in most cases. What counts here is where your permanent establishment (Betriebsstätte) is, and that can also be your co-working space in Bali.

There is a second point: Germany itself does not use a 183-day test to decide whether you are fully taxable here (unlimited tax liability, unbeschränkte Steuerpflicht). What counts is whether you have a residence (Wohnsitz, § 8 AO) or your habitual abode (gewöhnlicher Aufenthalt, § 9 AO) in Germany. So if you keep your flat in Germany, you can remain fully taxable here even if you spend most of the year abroad.

A residence is a home you keep under circumstances that suggest you will keep and use it. A continuous stay of more than six months in Germany counts as a habitual abode, unless it is purely for a visit or holiday and lasts no longer than a year.

Does deregistering end your German tax liability?

Even if you deregister properly from Germany, you are not automatically out. § 2 of the German Foreign Tax Act (Außensteuergesetz, AStG) contains what is called extended limited tax liability (erweiterte beschränkte Steuerpflicht).

It applies if you:

• were fully taxable in Germany as a German national for at least 5 years within the 10 years before your unlimited tax liability ended
• move to a low-tax country (roughly: the income tax burden there is more than one third lower than in Germany, § 2 (2) AStG), or are not resident in any country at all
• and still have substantial economic interests in Germany

…then extended tax liability applies in Germany until ten years after the end of the year in which your unlimited tax liability ended. It reaches further than the normal tax liability of non-residents: it covers all income that would not count as foreign income under § 34d of the German Income Tax Act (EStG), for example interest from a German bank account. It only applies in years in which this income comes to more than €16,500 (§ 2 (1) AStG).

Destinations popular with nomads that are often mentioned in this context include Dubai (United Arab Emirates), Paraguay, Georgia and Portugal, whose special NHR regime is being phased out. Whether a country counts as low-tax in your case depends on the comparison in § 2 (2) AStG. For your own situation, ask a tax adviser.

What if both countries tax you?

Imagine you live in a country that has no DTA with Germany and work for a German client. Neither country knows exactly what the other is doing. Then both countries may ask for tax, and you pay twice.

Germany has DTAs with many countries; the Federal Ministry of Finance (BMF) publishes their status every year. But not every nomad destination is covered, and where there is a DTA, the details matter:

• Cambodia: no DTA with Germany, so double taxation is a real risk
• Paraguay: no DTA (only an agreement for airlines)
• United Arab Emirates: the DTA expired at the end of 2021
• Thailand: DTA in place (applied since 1967)
• Costa Rica: DTA in place (applied since 2017)
• Indonesia (Bali): DTA in place, but complex

Without a DTA, if you are fully taxable in Germany, you usually use the credit method: you pay tax in both countries and credit the foreign tax against your German tax (§ 34c (1) EStG); on application, you can deduct it from your income instead (§ 34c (2) EStG). Either way, it only works if you have all the evidence and file your tax return on time.

Where does the tax office's post go while you are in Canggu?

Now for the practical nightmare: you have been travelling for two years and deregistered properly, but the tax office still has questions. Or it sends a tax assessment notice (Steuerbescheid), or an audit order (Prüfungsanordnung).

Where does it go? To your old address, where someone else has been living for a long time.

Deadlines do not wait until you read a letter. Under the deemed delivery rule (Zugangsfiktion) in § 122 (2) AO, a letter posted to an address in Germany counts as delivered on the fourth day after posting, and a letter sent abroad one month after posting, unless it arrives later or not at all.

From then on, the clock runs, for example the one-month period for an objection (Einspruch) (§ 355 AO). You notice nothing, and the notice becomes final.

If your tax return is missing, the tax office can also estimate your income (§ 162 AO) and send an estimated assessment (Schätzungsbescheid). It has no figures from you, so such an estimate is often higher than the tax you actually owe. If you do not challenge it, you pay too much.

What should you do now?

1. Clarify your tax status

• Are you still fully taxable in Germany (residence or habitual abode in Germany)?
• Does extended tax liability under § 2 AStG apply to you?
• Is there a DTA between Germany and the country where you are staying?

2. Name an authorised recipient

A German delivery address: give the tax office one where your post actually arrives, for example through an authorised recipient (Empfangsbevollmächtigter). If you live outside the EU and the EEA, the tax office can require you to name one (§ 123 AO).

3. Do not ignore your tax return

Even from abroad, you may have to file a German tax return, and often it is mandatory.

4. Collect evidence

Flights, rental contracts, co-working invoices: all of this can help you prove where you are resident for tax purposes.

How does PortoDoc travel with you?

PortoDoc gives you your postal address in Ahrensburg near Hamburg with your personal PD number. It is a delivery address for letters, not a business, registered-office or imprint address. You can give it to the tax office and to other senders for your letters, wherever you happen to be: Medellín, Chiang Mai or Lisbon.

• Every letter is scanned: We scan each letter and you get a notification. It then appears in your online account.
• AI deadline hint from the Business plan: it marks possible deadlines: a non-binding aid. The letter itself is what counts, and you (or your tax adviser) check every deadline yourself.
• AI summary: depending on your plan, complicated tax notices are summarised in plain language: an aid, not tax advice; the original letter counts.
• Reachable from anywhere: in your browser, with an e-mail notification when a new letter arrives.

Your nomad lifestyle does not have to suffer from German bureaucracy. PortoDoc takes care of your post, so you can focus on what you do best: working and living wherever you want.

Conclusion

The tax office does not forget you just because you post sunsets on Instagram. Tax liability, deadlines and official post do not disappear with your boarding pass. But with good preparation and a digital authorised recipient like PortoDoc, you keep track of your official post, wherever in the world you are.