You are personally subject to the German gift and inheritance tax law if any of the following criteria is met:

• Under § 1 (1) Nr. 1 a) ErbStG (German gift and inheritance tax law) you are personally subject to the law if you were a German tax resident at time of death of the deceased. You are a German tax resident if:

  The German income tax law (§ 1 Einkommensteuergesetz, EStG) mentions two criteria that will result in an expat becoming a German tax resident:

  • You have a permanent home in Germany (Wohnsitz), or
  • You have your habitual abode in Germany (gewöhnlicher Aufenthalt)

  Please note that meeting just one of these criteria is sufficient to make you a German tax resident. The details for these terms are governed in general in a separate tax law, called Abgabenordnung (AO). Because the law itself is relatively broad in its wording which requires interpretation, German tax courts and the German Ministry of Finance have filled the gaps with their interpretations.

  Read more: When Do You Become a Tax Resident in Germany?

• German citizens, who have had a tax residence in Germany during any time within the five years prior to death of the deceased, are subject to German gift and inheritance tax law based on § 1 (1) Nr. 1 b) ErbStG.
• German citizens with no tax residence in Germany who are employed by a public German entity or government body including their household members unless they are subject to unlimited gift and inheritance tax in their country of domicile (§ 1 (1) Nr. 1 c) ErbStG).
• Natural persons who are not subject to unlimited gift and inheritance tax based on the above criteria will be subject to limited taxation with their domestic (German) assets as defined under § 121 BewG in connection with § 1 (1) Nr. 3 ErbStG.