For information call now:
Internal Revenue Service
Austin Service Center
P.O. Box 149342
Austin, TX 78714-9342
Personal Services Income
Income that residents of
Germany receive for personal services as independent
contractors or self-employed individuals is subject to the provisions of the
treaty. Business profits are exempt from U.S. income tax unless the individual
has a permanent establishment in the United States. If they have a permanent
establishment in the United States, they are taxed on the profit attributable to
the permanent establishment.
residents of Germany receive for labor or or personal services performed
in the United
States as employees (dependent personal services) is exempt from U.S. income tax
if the residents meet three requirements.
- They are in the United States for no more than 183 days
during the calendar year.
- The income is paid by, or on behalf of, an employer who is not a U.S.
- The income is not borne by a permanent establishment that the employer has
in the United States.
Pay received by a resident of Germany for services performed as an employee and
member of the regular complement of a ship or aircraft operated in international
traffic is exempt from U.S. tax.
The exemption does not apply to directors' fees and similar payments
received by a resident of Germany for services performed in the United States as a member of the board of directors of a
company resident in the United States.
Income residents of Germany receive as public entertainers (such as theater,
motion picture, radio, or television artists, or musicians) or athletes is
subject to U.S. tax if their gross receipts, including reimbursed expenses, from
their entertainment activities in the United States are more than $20,000 during
the calendar year.
Income of German entertainers or athletes is exempt from U.S. tax if their visit
to the United States is substantially supported by public funds of Germany, its
political subdivisions, or local authorities.