Tax liability

The tax liability initially determines the group of recipients of tax claims (subjective tax liability) and the scope of the tax claim (objective tax liability). In general, the person who has to fulfill obligations imposed by tax laws is taxable. To this Duties count in particular that the taxpayer owes a tax, is liable for a tax, has to withhold and pay a tax for third parties or has to keep tax records (Section 33 AO).
The individual tax laws determine the specific tax liability and the group of people affected within the framework of the respective tax type. The tax laws differentiate between unlimited and limited tax liability. Anyone who has domicile, domicile, place of management or habitual residence in Germany is subject to unlimited taxation. The entire World income is subject to German tax liability (Section 1 I EStG, Section 1 KStG). Anyone who has neither domicile, seat or habitual abode in Germany is subject to limited tax liability on their domestic income (Section 1 IV EStG, Section 2 KStG). The limited tax liability can be extended (§§ 2 ff. AStG).

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