Taxation of foreign income

Tax residency is generally determined by physical presence (the 183-day rule). An individual becomes a tax resident of Germany upon employment and tax ID registration. If an individual spends less than 183 days in Russia within a calendar year, they lose their tax residency status in Russia. These statuses are not simultaneous for the entire year but are calculated based on the duration of stay in each jurisdiction.

Having a self-employment status in Russia while working under an employment contract in Germany generally does not pose issues for German authorities, especially if there's no active income from Russian self-employment post-relocation. Any income generated from Russian self-employment (e.g., rental income managed via self-employment status) must be declared in the German tax declaration. Based on user experience, this typically does not lead to complications or further inquiries from German tax authorities.

For issues related to tax declarations, especially concerning undeclared income from abroad, consult a licensed tax advisor (Steuerberater) or a tax lawyer (Rechtsanwalt). Self-filing may not be advisable for significant amounts. Seeking professional help is crucial to avoid legal complications.

Regarding Russian income that cannot be accessed due to banks being under sanctions, and the subsequent tax liability in Germany: individuals may refer to Section 11 (Paragraph 1) of the German Income Tax Act (EStG). This section might offer provisions for specific financial situations. However, declaring foreign assets and income is generally required. Consulting a tax advisor specializing in German international tax law is highly recommended for accurate guidance.

Maintaining German residency (Anmeldung, work permit, insurance) while physically residing in Russia can be problematic. From the German perspective, if the 'center of vital interests' remains in Germany, issues might be avoided. However, this arrangement can lead to significant tax residency complications in Russia, potentially resulting in loss of Russian tax residency benefits. Transferring salary from a German bank account to Russia can also be challenging. This setup is particularly complex for Russian citizens and may lead to legal and financial repercussions in both countries, especially concerning taxation and social security contributions.

For employees in Germany (especially those in tax class 1) with no additional income sources or complex deductions, self-filing a tax declaration is often feasible. Tools like WISO Steuer can be used for this. However, for self-employed individuals, those with multiple income streams, significant deductions, or family-related tax complexities, consulting a tax advisor (Steuerberater) is recommended. The ease of self-filing largely depends on the simplicity of one's financial situation.