Taxation of seafarers

Taxation of seafarers on merchant ships under the German flag

Taxation of seafarers on German-flagged seagoing ships is different for:

• Seafarers with unlimited tax liability in Germany, and
• Seafarers with limited tax liability in Germany.

The kind of tax liability applicable to the seafarer depends on his legal domicile or usual residence.

Seafarers with unlimited tax liability in Germany

Unlimited tax liability in Germany applies to seafarers, if their legal domicile or usual residence is in Germany, regardless where their income is generated (principle of world income).

It is also irrelevant, whether their nationality is German. Therefore, unlimited tax liability in Germany also applies to foreign seafarers, if their legal domicile is in Germany.

The tax liability of seafarers with unlimited tax liability in Germany applies without exemption, irrespective also of any double taxation agreement.

Seafarers with limited tax liability in Germany

Limited tax liability for domestic income applies to seafarers who have neither their legal domicile nor their usual residence in Germany. The usual residence of a seafarer on a German-flagged ship is only assumed to be not in Germany, if the ship is more than 183 days in foreign territorial waters or ports and the seafarer has a contract of hire for a period of not more than 365 consecutive days. In this case German tax is to be paid by the seafarer only for that part of his income which has been generated in German territorial waters and on the high seas. Domestic and foreign income must be documented in the ship's log-book and the payroll account for each period of payment, with date and time of entering or leaving foreign territorial waters.