Extended limited tax liability: ten years after you leave

Exit taxation is the familiar hurdle. Extended limited liability is the unfamiliar one — and it does not bite once on a given date but over years. Anyone who assumes after the move that they are finished with Germany usually finds out otherwise when a return is requested.

The conditions

• German nationality the provision attaches to nationality, not to the former residence
• Unlimited tax liability for at least five of the last ten years
• A move to a territory with low taxation
• Continuing substantial economic interests at home

All of them have to coincide. That is the good news: there are four levers, and three of them can be moved before departure — nationality, for most people, cannot; economic interests certainly can.

What changes — and what does not

Question	Limited liability	Extended limited
Which income is caught	an exhaustive list of domestic income	the same list, widened by further income with a domestic nexus
Duration the period runs whether or not you are thinking about Germany	as long as domestic income arises	up to ten years after departure
Filing duty	for the income caught	for the widened range
A new kind of tax it is a broader base, not an additional charge

The lever sits before departure

The provision applies because economic interests remain at home. Ordering those interests before leaving — rather than letting them sit untidied for years — changes the condition rather than the consequence. That is the difference between planning and hoping.

One caveat: a restructuring shortly before departure is itself a taxable event and can trigger the exit taxation described in Exit taxation. The two provisions belong considered together, not one after the other.

Where our competence ends

Whether the provision bites in your case turns on a comparative calculation and on valuing your domestic interests. Both belong with a qualified professional in Germany. What we take on is the Georgian side — residence, structure, running operations — and the honest statement that it does not settle the German question.

Extended limited liability — frequently asked

Do all the conditions have to be met together?

Yes. Nationality, five of the last ten years of unlimited liability, a move to a low-tax territory, and continuing substantial economic interests at home. If one falls away the provision does not apply — and that is where the planning sits.

Is Georgia a low-tax territory for this purpose?

That is a calculation, not an opinion: the burden in the destination state is compared with a German benchmark for the same income. At one percent on a sole trader turnover the outcome is close to hand, but it depends on the case and belongs calculated rather than assumed.

What counts as substantial economic interests?

Above all holdings in domestic businesses, domestic income above a threshold and domestic assets above a threshold. Anyone who leaves everything at home and moves only their residence typically meets this test.

What changes in practice?

The range of income taxable in Germany is widened beyond ordinary limited liability. No new kind of tax arises, only a broader base — with the filing duty that goes with it.

This article is general information and does not constitute legal or tax advice. Whether the conditions are met is a question of the individual case and belongs with a qualified professional in the country you are leaving. As at August 2026; subject to changes in the law.