As an employee, according to Art. 15 Para. 1 DBA Austria, the remuneration from dependent work is to be taxed exclusively in the country of residence of the employee. If the activity is actually physically performed in the other country, the other country has the right to tax the remuneration.
However, according to Art. 15 Para. 2 – 6 DTA Austria, this basic rule can be deviated from. An exception is the application of the so-called cross-border workers regulation according to Art. 15 Para. 6 DBA-Austria.
Two conditions must be met for the application of the cross-border workers regulation:
On the one hand, both the place of residence and the place of work must be within the border zone. This border strip covers 30 km along the border, based on the straight line. (cf. Consultation Agreement Germany – Austria of 08/24/2000, BStBl. I 2010, p. 645).
On the other hand, the cross-border worker hast to return daily from his place of work to his place of residence (cf. Art. 15 Para. 6 No. 2 DBA Austria), whereby it is not detrimental to the application of the regulation if the taxpayer has no more than 45 working days (based on a entire calendar year) does not return to his place of residence or does so outside of his work for his employer (e.g. due to a business trip to a third country; cf. Consultation Agreement Germany – Austria of 08/24/2000, BStBl. I 2010, p. 645).
The following days are not to be taken into account in the case of non-return (“45-day limit”):
- Sick days,
- Parental leave/maternity leave and
- Working days in the home office (so-called teleworking), provided that the working days have been spent in the home office due to the measures taken as part of the corona pandemic. The home office days only apply in the period from March 11, 2020 to June 30, 2022, not on the days of non-return (cf. consultation agreement Germany – Austria of March 28/29, 2022, BMF of April 4 2022, IV B 3 – S 1301-AU/19/10006:005).
Outside of the above mentioned period (March 11, 2020 – June 30, 2022), home office days count towards the number of days of non-return (“45-day limit”), since the daily border crossing does not take place (cf. Consultation Agreement Germany – Austria of 08/24/2000, Federal Tax Gazette I 2010, p. 645).
For the assessment years 2020 and 2021, income from employment is mainly taxed in the country of residence. The possibility of using the home office was retained by most companies in Germany and Austria. Since the simplification regulation for working from home expired on June 30, 2022, days in the home office will again be considered days of non-return as part of the cross-border workers regulation from July 1, 2022. If the 45-day limit is exceeded over the calendar year, the cross-border workers regulation is ultimately not applicable. The taxation right is to be divided into the total working days based on the days of activity in Germany and in Austria.
It remains to be seen whether fundamental adjustments will be made to the double taxation treaty on the subject of working from home. In order to keep cross-border activities of employees up to date, especially within the EU, a change to this effect would be essential.
Hannes Hellfeuer | TLI Steuerberater