Business and shareholding
Owner or co-owner of a German business, limited partner with more than 25 percent of the income, or a shareholding within section 17 EStG in a German corporation.
Sec. 2 AStG
Article · Legal position 10/2026
Leaving Germany with crypto: section 2 AStG
Deregistering does not finish the job. If you move to a low-tax country and keep substantial economic interests in Germany, the extended limited tax liability of section 2 of the Foreign Tax Act (AStG) can continue for ten years. This is the test, step by step, with sources.
The essentials
- Leaving Germany does not by itself trigger German tax on crypto held as private assets. It is different for business assets (section 16(3a) EStG) and shares in a company (section 6 AStG). Whether section 2 AStG or the destination country's law then applies depends on the individual case.
- Section 2 AStG applies if, in the ten years before you leave, you were fully taxable in Germany for at least five years, you live in a low-tax territory or nowhere, and you keep substantial economic interests in Germany.
- The period covers the year you leave and the next ten years. If you leave in 2026, you can be affected until the end of 2036.
- There is no country list. Dubai normally passes the tariff comparison. For Haiti or any other country, you run the comparison yourself.
- There is no 25 percent threshold for a low-tax country. The 25 percent concerns limited partners.
- 1 January is the reference date for the asset test. A sale can create income that section 2 AStG catches. How crypto fits in is unsettled.
- The threshold is 16,500 euro of income per tax year. If you exceed it, all of it is taxable, not only the excess.
German terms you will meet
- Erweiterte beschränkte Steuerpflicht: extended limited tax liability. German tax continues on some income after you leave.
- Wegzugsbesteuerung: exit tax on shares in corporations (section 6 AStG). It does not apply to crypto you hold directly.
- Niedrigsteuerland / niedrig besteuerndes Gebiet: low-tax country or territory.
- Wesentliche wirtschaftliche Interessen: substantial economic interests in Germany.
- Freigrenze: a threshold. Above it, everything is taxed. Below it, nothing is.
- Gegenbeweis: rebuttal evidence.
The conditions in overview
Extended limited tax liability means that Germany keeps taxing income beyond the ordinary limited tax liability of section 49 EStG. It covers income that would not be foreign income under section 34d EStG if you were fully taxable. Section 2 AStG requires all of the following:
- German citizenship in the relevant period. Dual citizenship does not matter. Giving up German citizenship later does not exempt you, in the administration's view.
- Five years of full tax liability in the ten years before your full tax liability ends. Periods are added up. Liability under section 1(2) or (3) EStG does not count.
- Residence in a low-tax territory, or in no foreign territory at all.
- Substantial economic interests in Germany.
- Income above 16,500 euro in the tax year. This is a threshold, not an allowance.
The period runs from the year in which full tax liability ends to the end of ten years after that year. The tax administration describes it as the year of departure and the following ten years. Sources: section 2 AStG, ministry circular of 22 December 2023, IV B 5 - S 1340/23/10001 :001, paras. 4, 14 to 17, 20 to 22.
What a low-tax country is
The statute has no country list. Section 2(2) AStG contains two alternative tests:
- Tariff comparison: foreign income tax for an unmarried resident with taxable income of 77,000 euro would be more than one third lower than German tax. The tariff of the tax year counts, including tariff allowances.
- Preferential regime: a regime granted compared with general taxation can substantially reduce the burden. According to the Federal Fiscal Court it must attach to a personal feature that typically newcomers meet. A general exemption for all residents is not enough. Actual use is not required (BFH IX R 37/21, judgment of 14 January 2025).
Rebuttal: in both cases the presumption of low taxation falls away if you prove that your total taxes on your income reach at least two thirds of the German income tax that would apply under full tax liability. You carry the burden of proof (circular, paras. 23 to 26).
There is no 25 percent threshold here
The figure 25 percent does appear in section 2 AStG, but elsewhere: a limited partner has substantial economic interests if more than 25 percent of the income from the partnership is attributable to them. It is neither a tax rate nor a share of capital. Anyone who shortens the test to "below 25 percent" is testing the wrong thing.
Substantial economic interests in Germany
The three groups in section 2(3) AStG are alternatives. One is enough:
Income
Income that is not foreign income exceeds 30 percent of total income or 62,000 euro in the tax year.
Assets on 1 January
Assets whose yield would not be foreign income exceed 30 percent of total assets or 154,000 euro at the start of the tax year.
This is where 1 January matters: the business and asset features are tested at the start of the tax year, the income test of no. 2 for the whole year. According to the administration, tax-exempt income and assets are generally left out. Source: circular of 22 December 2023, paras. 27 to 30.
What this means for crypto assets
Simply holding. Holding produces no income, so holding alone does not trigger section 2 AStG. It can enter the asset test on 1 January. Whether crypto counts there is unsettled: the administration generally leaves tax-exempt assets out, and gains on crypto after the one-year holding period are tax-free. We advise not to rely on this but to include the holdings in the test.
Selling. A private gain under section 23 EStG is not German-source income under section 49 EStG. Ordinary limited tax liability therefore does not apply merely because a wallet or exchange is located in Germany. Section 2 AStG goes further: it also catches income that does not count as foreign under section 34d EStG. Under section 34d no. 8 (b) EStG, gains from private disposals are foreign if the assets sold are located in a foreign state. There is no situs rule for decentralised crypto, and a wallet or custodian is, on the sources we reviewed, not a connecting factor. If foreign situs cannot be established, the wording does not rule out that the gain falls under section 2 AStG when the other conditions are met.
The positions in the literature. As our book sets out (fn. 43), one view assigns the on-chain holding to the state of residence. That would make it foreign income, which section 2 AStG does not catch. Another view finds no clear foreign connection, and a third leans towards the state-of-residence position. None of these views has been confirmed by the highest court. We set the positions side by side and do not decide the question here.
Our assessment
There is no ministry circular and no case law that deals with crypto assets expressly. The circular of 6 March 2025 contains no rule that treats crypto as German because of a German custodian or wallet. We treat the question as open. If you plan, allow for both outcomes. Before you move to a low-tax country, a sale inside the one-year period, ongoing income from staking and lending, and your holdings on 1 January should be reviewed separately. On the types of income: circular of 6 March 2025, BFH IX R 3/22.
If the holding period falls. Under the ministry's draft bill, newly acquired crypto assets would be taxed irrespective of the holding period (holding period article). That is not law yet. If it came, sales gains would regularly be taxable, and section 2 AStG would matter for more people who leave. In our reading, the draft does not provide for an exit tax on crypto assets.
Relief. Section 2(6) AStG caps the additional tax on proof, to the extent it would exceed the tax payable under full liability with a German home only. Capital income in the flat-rate regime of section 32d EStG is left out when the tax rate is computed.
The case of Dubai
Individuals in the United Arab Emirates pay no income tax. With a tariff of zero, the burden of the 77,000 euro comparison case is more than a third below the German one. The tariff comparison of section 2(2) no. 1 AStG is therefore met. General tax freedom is not a personal preferential regime under no. 2 (BFH IX R 37/21). The rebuttal stays available but rarely succeeds without substantial tax in the destination country.
In our research no tax treaty between Germany and the UAE has applied since 2022. A treaty barrier that could displace section 2 AStG is therefore missing (circular of 22 December 2023, para. 7). For a move to Dubai the real question is the other conditions: if you keep a home in Germany, you stay fully taxable anyway. If your interests in Germany are substantial, section 2 AStG continues.
Our subsidiary TII MAN GROUP FZCO supports clients in Dubai. We handle the German side. Moving to Dubai
The Haiti exam case
In the German tax adviser exam in October 2026, a move with crypto assets to a low-tax country was tested, with Haiti as the destination. Answering "Haiti is a low-tax country" skips the test. This is how the subsumption works:
- Personal conditions: citizenship, five years of full liability in the last ten years, end of full liability. Do not forget to distinguish section 6 AStG: crypto held directly is not a share in a corporation.
- Low taxation: tariff comparison at 77,000 euro under the law and the tax year of the case. Then the personal preferential regime, then the rebuttal.
- Substantial economic interests: nos. 1 to 3 with the thresholds 25, 30, 62,000 and 154,000. Do not overlook 1 January.
- The 16,500 euro threshold and the period affected.
- The income: which of it is not foreign under section 34d EStG? Treat sales, staking and lending separately.
- Consequences: tax rate, section 32d EStG, cap under subsection 6, filing duty.
On Haiti itself, we know of no judgment and no current administrative circular that classifies the country as a low-tax territory for individuals. The repealed application circular of 14 May 2004 listed "Haiti, special zones" in an overview under low corporate tax burden or tax incentives (circular of 14 May 2004). Those were special zones, not a general personal income tax rate, and the circular no longer applies. The current circular of 22 December 2023 has no country list and requires an individual test; in case of doubt the Federal Central Tax Office can make findings. A conclusion that a move to Haiti equals low taxation is not supported.
What to do before you leave
Count the five years
Check whether the five-out-of-ten-years test is met. Periods of full tax liability are added up.
Measure your German interests
Run holdings, businesses, income and your assets on 1 January through the three groups.
Time your sales
The timing of a sale relative to your departure and to the one-year period decides whether income arises that section 2 AStG could catch at all.
Secure evidence
Deregistration, giving up home and residence, a residence certificate from the destination country and tax evidence for the rebuttal.
Book
18 countries
The book on leaving Germany with crypto
Extended limited tax liability under section 2 AStG is a chapter in our book "Krypto-Steuern und Auswandern" (published 12 September 2026, in German), plus 18 country chapters, a departure timeline as checklist and three template letters. On Amazon · Leaving Germany
Questions and answers on section 2 AStG and crypto
Is Dubai a low-tax country under section 2 AStG?
Normally yes. The test is the tariff comparison in section 2(2) no. 1 AStG: if foreign income tax for an unmarried resident with taxable income of 77,000 euro would be more than one third lower than German tax, taxation is low. Where individuals pay no income tax, this is met. You can rebut it by proving that your total taxes reach at least two thirds of the German income tax.
How long does section 2 AStG apply after I leave?
For the year in which unlimited tax liability ends and the following ten years. If it ends in 2026, the period normally runs to 31 December 2036. The conditions must be met again in each year.
Is there a 25 percent threshold for a low-tax country?
No. The 25 percent in section 2 AStG concerns limited partners and the test for substantial economic interests (more than 25 percent of the income from the partnership). For low taxation the test is "more than one third lower", plus the two-thirds rebuttal.
Does simply holding Bitcoin on 1 January trigger section 2 AStG?
Not by itself. Holding produces no income. But 1 January is the reference date for the asset test within substantial economic interests: if assets whose yield would not be foreign income exceed 30 percent of total assets or 154,000 euro at the start of the year, the test is met. Whether and how crypto counts is unsettled. The tax administration generally leaves tax-exempt income and assets out.
Does a gain from selling crypto fall under section 2 AStG?
It depends on whether the gain is taxable and whether it counts as foreign income under section 34d EStG. A gain after the holding period is not taxable. A gain inside the one-year period is. Section 34d EStG has no express situs rule for decentralised crypto, and a wallet or custodian in Germany does not create German situs. The question is open, and both outcomes need to be considered.
How do I test a case such as Haiti or another country?
There is no statutory country list. For the specific country and year you apply the tariff comparison in section 2(2) no. 1, the personal preferential regime in no. 2, and the rebuttal, then the other conditions of section 2(1) AStG.
Does a tax treaty with the UAE help?
In our research no tax treaty between Germany and the United Arab Emirates has applied since 2022. There is then no treaty protection that could displace section 2 AStG, as there can be in other cases.
Who advises me on the ground in Dubai?
Our subsidiary TII MAN GROUP FZCO in Dubai (tiiman-group.ae) works with clients on the ground. We handle the German side from Potsdam and coordinate both.
Responsible for content: Matthias Steger, German certified tax advisor (Steuerberater), nine years as a tax auditor.
Primary sources (German): section 2 AStG, section 21 AStG, section 34d EStG, section 49 EStG, circular of 22 December 2023, BFH IX R 37/21, circular of 6 March 2025.
Legal position: 11 October 2026. How crypto assets fit under section 34d EStG is our own legal opinion on an unsettled question. This article is not advice on an individual case. Where this English text and the German text differ, the German text prevails.
Primary sources (German): section 2 AStG, section 21 AStG, section 34d EStG, section 49 EStG, circular of 22 December 2023, BFH IX R 37/21, circular of 6 March 2025.
Legal position: 11 October 2026. How crypto assets fit under section 34d EStG is our own legal opinion on an unsettled question. This article is not advice on an individual case. Where this English text and the German text differ, the German text prevails.