Living and working abroad

Please ensure that your social security situation is clarified!

Please read the following notes carefully and take suitable measures, if necessary:

If your employment touches on the law of another country (“Auslandsberührung”) and/or if you are working abroad, the so-called “Beschäftigungslandprinzip” (country of employment principle) applies. According to this principle, the social security law of the country you are working in must be applied.

To avoid paying double social security contributions and to determine which benefits you are entitled to you must ensure that the social security law applicable to your case is determined if:

– you are seconded (i.e. if your place of work is moved or if you work in several locations)
– you work for multiple employers (in Germany and abroad).

If the legal situation remains unresolved for the duration of your secondment and/or multiple employment relationships, you are exposed to the following risks, which can result in considerable disadvantages:

Risks arising from Beitragsrecht (contribution law):

• Failing to pay the required social security contributions will result in mandatory back payments
• Erroneously paid social security contributions are not eligible for reimbursement after a certain period of time has elapsed
• Failing to pay your social security contributions in accordance with the rules constitutes a criminal offence as per § 266 Strafgesetzbuch (StGB, German Criminal Code) (withholding and embezzling wages and/or social security contributions).

Risks associated with Leistungsrecht (benefits law):

• You are not insured although you have been paying social security contributions
• Erroneously paid social security contributions may not count towards the qualifying period for certain benefits (e.g. entitlement to draw a pension or unemployment benefits)
• If your social security status was not or wrongly determined and if, due to this, you were to receive benefits in line with “Leistungsrecht”, the university would be liable for damages

To have your social security status determined, you must request an “Entsendebescheinigung” (e.g. A1, D/ ___ 101 or similar) and forward it to the LBV for further processing.

Please request your “Entsendebescheinigung” or get in touch with us as early as possible, so we can request it on your behalf. More information is available under the categories applying to your case.

If you have your A1 certificate, you have take a first important step towards clarifying your social security situation. Important: Please forward your A1 to the Landesamt für Besoldung und Versorgung Baden-Württemberg (LBV). If you prefer, the SSV team will be happy to forward it to the LBV on your behalf.

If foreign social security law has been determined for you, the LBV will contact you in writing to inform you about the procedure and to arrange for the next steps to be taken. Please do not ignore mail from the LBV! Even if dealing with what most will regard as rather dry correspondence - especially employees with limited German skills - can be a challenge: The decision set out in your A1 can only be implemented if you follow the required steps.

If your A1 indicates that foreign social security law applies, the LBV will ask you to sign an agreement based on EU regulations 883/04 and 987/09¹⁾.

Implementing an A1 indicating that foreign social security law applies is quite simple, really. “If you prove that you pay into the foreign social security system,you are eligible to receive a reimbursement from your employer (in your case, the LBV) for social security contributions paid in Germany”.

In our experience, employees tend to assume that, after submitting their A1 and signed agreement, their duty is done and that the LBV will take over from there (as regards the reimbursement of social security contributions, etc.). After a while, most employees wonder why nothing happens (and no reimbursement is made). In most cases, the LBV is not at fault. Before the LBV can take further action, you need to work out a few things both on your own and in collaboration with your social security provider abroad (the provider that issued your A1). Please read our brochure “Abwicklung A1 EU-Ausland” (“A1 request”) to find out more.

Please do not hesitate to contact us if you have questions about your A1 certificate! We are also happy to help if you experience difficulties reading and understanding your LBV correspondence.

Please remember to inform the LBV and/or us of any changes to the employment relationship you were issued your A1 for. If the changes to your employment relationship are likely to affect your social security status (e.g. if the secondment period is shortened or your contract is cancelled), you need to request a new A1 based on the updated information that will have to be processed and implemented. Please remember to take the necessary steps as early as possible as limitation periods apply.

Please also note that all of this is not just about applying foreign social security law in Germany, but also about applying German social security in another country or, if you are in multiple employment relationships, about several member states’ social security laws.

Implementing an A1 thus comes with a lot of administrative effort. Unfortunately, this cannot be avoided given the differences between the individual countries’ social security systems. The administrative effort involved, however, should not be seen as an argument against international mobility. On the contrary! Your research trip demonstrates your eagerness for international exchange to the government. It also shows that the process needs to be streamlined. Always bear in mind: This is about your contributions and the legal claims resulting from them.

¹⁾ EU regulation 883/04 aims to prevent double social security payments. The procedure for implementing this regulation is laid down in EU regulation 987/09.

Are you living in Switzerland - or would you like to move there - and have an employment contract with the University of Konstanz? Do you have questions about whether working in Germany while living in Switzerland is possible and, if so, what issues you need to pay attention to with regard to taxes and social security?

Until now, the preferred constellation has been to live in Germany and to work in Switzerland, simply because working in Switzerland is financially very attractive if one doesn’t also live there. However, it has become increasingly hard to come by suitable accommodation on the German side of the border, which means that some University of Konstanz employees who were unable to obtain accommodation in Konstanz have no choice but to look for accommodation in Switzerland. This a phenomenon that can be observed along the entire German-Swiss border from Konstanz all the way to Basel.

Working at the University of Konstanz while living in Switzerland is not only possible, but even quite attractive in some respects. Moving to Switzerland will result in administrative changes to your tax and social security status. These changes can be made easily and quickly once you have moved your place of residence to Switzerland.

The Grenzgänger-Information Hegau-Bodensee will be happy to answer your questions about being a cross-border commuter.

Grenzgänger-Information Hegau-Bodensee

If you do not reside in Germany (any longer) and/or are no longer registered as a German citizen, you must submit an “Antrag für beschränkt einkommenssteuerpflichtige Arbeitnehmer” (request for employees with limited income tax liability). This request must be made to the university's tax office, the “Finanzamt Stuttgart-Körperschaften”. This tax office determines the amount of taxes you are due to pay either by “Steuerklasse” (tax category), which is typically category I, or by “Quellenbesteuerung” (deduction of tax at source, i.e. 4.5% of your gross salary).

If you are given “Grenzgänger” (cross-border commuter) tax status, the income you earn in Germany will be subject to 4.5% “Quellensteuer” (tax deducted at source). Your tax liability in Switzerland is based on 80% of the gross income you earn in Germany. Don't worry if your tax office has put you in “Steuerklasse I” (tax category I). As per the “Doppelbesteuerungsabkommen” (double tax agreement) in effect between Germany and Switzerland, you can have your German income as well as the taxes you have paid in Germany count towards the income tax statement you submit in Switzerland.

We highly recommend that you submit your “Antrag für beschränkt einkommenssteuerpflichtige Arbeitnehmer” (request for employees with limited tax liability) as soon as you give up your place of residence in Germany. Once you have given up your place of residence in Germany and/or are no longer registered there, you will no longer have a tax ID, which means that the Landesamt für Besoldung und Versorgung (LBV) will have no choice but to calculate your salary on the basis of tax category VI. Tax category VI comes with a very high monthly tax burden. To avoid this, please make sure to submit the above-mentioned request as soon as possible or let us take care of it for you.

As soon as the SSV team has informed the LBV that your request has been submitted to the university's tax office, the LBV will respond by putting you in tax category I to reduce your monthly tax burden. Please note that it may take several weeks for the tax office to issue your “Bescheinigung für den Lohnsteuerabzug” (confirmation of income tax deduction). Once the LBV have received your confirmation, your gross salary will be re-calculated. Any excess taxes you may have paid will be reimbursed in full.

Please note that the LBV can only reimburse you for payments made during the on-going calendar year. Reimbursements you may be due for the previous year cannot be paid out. We recommend that you claim these reimbursements in your income tax statement.

If you plan to submit your “Antrag für beschränkt einkommenssteuerpflichtige Arbeitnehmer” to the Finanzamt Stuttgart-Körperschaften yourself, please also submit an “Ansässigkeitsbescheinigung” (certificate of residence) that has been completed and signed by your cantonal tax office as well as a copy of your passport.

Please forward your documents to:

Finanzamt Stuttgart-Körperschaften
Paulinenstraße 44
70178 Stuttgart
Phone: +49 711 66730

Please submit the “Bescheinigung für den Lohnsteuerabzug” you have been issued by the Finanzamt Stuttgart-Körperschaften to the LBV and/or to us at the SSV so your tax status can be corrected.

Feel free to contact us if you have questions or problems.

Cross-border commuters-employee-employer-association GAAV (website in German)

Unfortunately, we cannot provide a general answer to the question if and to what extent you are state-insured during your employment at the University of Konstanz. There is an alliance of EU member states, EEA states (Iceland, Liechtenstein and Norway) as well as Switzerland (as of 01.04.2012). However, all EU/EEA states and Switzerland have their own social security systems. Still, the alliance of above-mentioned states have an agreement regarding the most important branches of social security, i.e. pension insurance, health insurance, nursing care insurance, unemployment insurance and accident insurance. In the above-mentioned states, the

• “Regulation (EC) No 883/2004 — on the coordination of social security systems” as well as

• “Regulation (EC) No 987/2009 of the European Parliament and of the Council of 16 September 2009 laying down the procedure for implementing Regulation (EC) No 883/2004 on the coordination of social security systems”

set out the social security legislation applicable to the relevant employment situation and the benefits you are eligible to claim.

If you want to live in Switzerland and work in Germany, we need to answer the following questions:

1. Will the remuneration you receive for your work at the University of Konstanz exceed the “Jahresarbeitsentgeltgrenze” (annual income threshold)?
2. Is the University of Konstanz your sole employer or are you working for other employers, e.g. in Switzerland?

On 1):
If you know that you are not likely to exceed the annual income threshold - either because of your salary bracket and salary step and/or your employment volume - the LBV will automatically sign you up for German social insurance. You will also be classified as a so-called “gesetzlich krankenversicherte/r Beschäftigte/r” (employee with statutory German health insurance, GKV).

If your salary exceeds the annual income threshold, statutory health insurance ceases to be compulsory. In this case, you can either take out private health insurance (PKV) or opt for voluntary statutory health insurance (“freiwillige GKV”). Under certain conditions, you may then be able to have your German employment relationship covered by your Swiss health insurance.

To find out if you exceed the annual income threshold, please contact the Landesamt für Besoldung und Versorgung Baden-Württemberg (LBV), stating your salary bracket and step, your employment volume (full-time / part-time) and the period of your employment contract. The LBV will then estimate your gross income for the following 12 months, taking special annuities as well as potential other bonuses and/or grants (e.g. mobility grants) into account. Depending on the thus determined salary status, the LBV will contact you to discuss the next steps.

Detailed information on the current annual income threshold and important components in social security is available under “Rechengrößen Sozialversicherung” (in German) (overview of contribution rates and components for social security.

More information on these rates can be found under “Miscellaneous”.

On 2):
If you are in secondary employment - e.g. if you have a second job in Switzerland - you will have to think about the weighting in percent of your employment volume in both countries. This has far-reaching implications for your social security situation. Please take a moment to read our page “Beschäftigung in zwei oder mehreren EU-Staaten” (employment in two or more EU states).

Here, you can request to have the social security law that should be applied to both your German and Swiss employment relationships assessed via a so-called “A1-Bescheinigung” (A1 certificate).

Important: The A1 can help you avoid paying social security contributions in both countries as well as further disadvantages that may arise. Paying into a social security system without clear information on the social security law applicable to your case means that you are not automatically entitled to claim benefits.

Various questions need to be answered first and the topics that have to be addressed are rather complex. However, none of this should deter you from moving your place of residence to Switzerland.

Do please get in touch with us as soon as you have decided to do so. We can help you take the relevant steps.

As a visiting professor, your employment at the University of Konstanz is likely to be short-term only. This leads us to assume that you will maintain your permanent place of residence in your home town abroad and will not move your main place of residence to Germany.

If this is correct, we recommend that you take a moment to evaluate your tax and social security situation and take corresponding measures, if need be, as earning a salary from a German employer for your work as a visiting professor has certain implications.

Most visiting professors work at the university during the summer semester. Tax and Social Security Services (SSV) are notified by Human Resources of your invitation by our Rector to spend time at the University of Konstanz as a visiting professor.

We will email you six to eight weeks ahead of your stay to advise you on your tax and social security status as a visiting professor and to offer our assistance with administrative tasks.

Our aim is to discuss the most important and pressing administrative issues with you before you travel to Germany and to take the required steps on your behalf.

Our mission is to minimize the administrative burden of your research contract by providing the best possible service and by helping you take care of the formalities.

In general, everybody has to pay income tax at their permanent or usual place of residence for their entire income earned worldwide. As a consequence, you will have to pay income tax in Germany and at your permanent place of residence for the salary earned from the University of Konstanz. To avoid paying tax twice, a double taxation agreement between Germany and the country of your permanent residence determines if, and to what amount, you will have to pay tax for the income you earn in Germany. You can claim this income and the taxes paid for it in the income tax return you file at your permanent place of residence outside of Germany. The taxes paid in Germany might then be taken into account when determining your tax liability in your home country.

We recommend that you submit the following request in good time before starting your work as a visiting professor in Germany: “Antrag auf Erteilung einer Bescheinigung für den Lohnsteuerabzug für beschränkt einkommensteuerpflichtige Arbeitnehmer” (request for a certificate for income tax deduction for employees with limited tax liability). Once you have made this request, you will receive a certificate on which the amount of income tax you are due to pay on your salary from the University of Konstanz will be based. If you do not submit the above-mentioned request, you will be put in tax category VI. Taxes in category VI are very high. You can avoid this by submitting the request “Antrag auf Erteilung einer Bescheinigung für den Lohnsteuerabzug für beschränkt einkommensteuerpflichtige Arbeitnehmer”, as you will then be placed in a much more favourable tax category (usually tax category I). In some cases, you may even be exempt from paying taxes. The decision regarding your tax liability is taken by the tax office “Finanzamt Stuttgart – Körperschaften”.

The University of Konstanz's Tax and Social Security Services will gladly file the request for you. Please contact us as soon as possible (6 - 8 weeks before you start working here).

If you wish you can also contact a tax accountant. You can find a list of local tax accountants on this website (in German):

Finding a tax accountant
(see box “Lohnsteuerhilfevereine und Steuerberater in Ihrer Nähe” (local tax accountants and income tax assistance associations)).

Claiming “Freibeträge” (tax-free amounts)
(for visiting professors from the EU/EEA area):

As a visiting professor, you may be able to claim certain expenses as a “Freibetrag” (tax-free amount) in your request “Antrag für beschränkt einkommensteuerpflichtige Arbeitnehmer”. This “Freibetrag” applies to expenses related to travelling to and living in Konstanz. This includes:

• Flight/travel expenses for travelling from your permanent place of residence to your temporary place of residence in Germany
• Rental costs for apartment / hotel
• Travel costs from your apartment / hotel in Konstanz to the University of Konstanz
• Lump sums to cover subsistence expenses, if applicable

If you would like to claim tax-free amounts (Freibetrag) in your “Antrag für beschränkt einkommensteuerpflichtige Arbeitnehmer” (and if you are a member of an EU/EEA state), you should include all receipts/invoices when filing the request, if possible.

Please note that, if you request limited tax liability including tax-free amount in Germany, you will have to file an income tax return in Germany in the following year.

Social security law is similar to tax law: To avoid paying social security contributions twice and to ensure that you will be able to claim insurance benefits in the future, special social security agreements have been concluded (e.g.: EU regulation 883/04). However, some (very few) countries have not concluded such an agreement with Germany. If your home country is one of them, you will have to pay social security contributions in both countries. Social security insurance includes the areas of pensions, health care, nursing care, unemployment and accidents.

The applicable social security law is very complex and we cannot give general answers. It is absolutely mandatory to take your individual circumstances into account. Please contact us so we can get an overview of your social security situation and take corresponding measures.

If you earn a salary in Germany, but do not have a place of residence or are not ordinarily resident here and spend less than 183 days in Germany, you are subject to limited tax liability.

We recommend that you submit an “Antrag auf Erteilung einer Bescheinigung für den Lohnsteuerabzug für beschränkt einkommensteuerpflichtige Arbeitnehmer” (request for an income tax deduction certificate for employees with limited tax liability) well before starting your employment in Germany. You will receive a certificate that will be used to calculate the amount of income tax you are due to pay on your salary from the University of Konstanz.

If you do not submit such a request, you are likely to be placed in tax category VI. Taxes in category VI are very high. You can avoid this by submitting the request “Antrag auf Erteilung einer Bescheinigung für den Lohnsteuerabzug für beschränkt einkommensteuerpflichtige Arbeitnehmer”, as you will then be placed in a much more favourable tax category (usually tax category I). The amount of taxes you are due to pay is determined by he Finanzamt Stuttgart – Körperschaften.

We are happy to submit the required “Antrag für beschränkt einkommensteuerpflichtige Arbeitnehmer” (request for employees with limited tax liability) on your behalf. Please contact us as soon as possible (6 - 8 weeks before you start working here).

Can I file an income tax return as an employee with limited tax liability in Germany?

In principle, if you are an employee with limited tax liability, the monthly income tax payments deducted from your salary are sufficient to discharge your tax liability in Germany.
This means that you are not eligible for a refund of your monthly income tax payments either in part or in whole. The German tax authorities would in all likelihood decline any income tax return request you filed.

However, if you are a citizen of an EU/EEA state, you can have a tax-free amount included in your “Bescheinigung für beschränkt einkommensteuerpflichtige Arbeitnehmer” (certificate for employees with limited tax liability). If you wish to do so, you must submit this request to the relevant tax office yourself, since only you as an applicant are authorised to sign it.

If you received a “Bescheinigung für beschränkt einkommensteuerpflichtige Arbeitnehmer” (certificate for employees with limited tax liability) including a tax-free amount, you are required to submit an income tax return after the end of the calendar year if your annual salary exceeded € 10,700.

Since you do not maintain a place of residence or are not ordinarily resident in Germany, the Finanzamt Stuttgart - Körperschaften is responsible for processing your request:

Finanzamt Stuttgart - Körperschaften
Paulinenstrasse 44
70178 Stuttgart

Phone: +49 711 667-30

If you were granted a tax-free amount in your wage and tax statement, you are required to submit an income tax return after the end of the calendar year.

If the German tax authorities ask you to file an income tax return in the following years even though you do not receive a salary in Germany any more (e.g. because you moved abroad and did not live and work in Germany during the year in question), you can request an exemption by providing a brief written explanation.