Decree on foreign activity

According to the decree on the tax treatment of employee income when working abroad (foreign work decree), foreign income from non-self-employed work can be exempted from domestic taxation at the request of a tax resident or tax non-resident at the permanent establishment tax office if the following conditions are met: The international activity is uninterrupted for at least three months exercised in a state with which there is no tax treaty.
The activity is carried out for a domestic employer, domestic supplier, manufacturer, contractor or holder of mineral extraction rights and is related to assembly work, the exploration or extraction of mineral resources, advice or German development aid. The application for exemption must be submitted to the business premises tax office.

Betriebsstätte ist hier der business des Arbeitgebers, in dem der für die Durchführung des Lohnsteuerabzugs maßgebende Arbeitslohn ermittelt wird Lohnsteuerbetriebsstätte gem. § 41 II EStG). Der freigestellte Arbeitslohn wird allerdings bei der Ermittlung des anzuwendenden Steuersatzes berücksichtigt (Progression reservation).

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