Dubai Influencer Taxes: Gerald Hörhan Warns of Costly Pitfalls

Investmentpunk Academy GmbH CEO Gerald Hörhan has highlighted significant tax risks that influencers moving to Dubai may encounter. Many mistakenly believe a simple change of address is sufficient to avoid taxes, but the reality is far more complex.

Hörhan identifies key pitfalls, including German exit tax (Wegzugsteuer), double taxation without proper agreements, and the risk of German tax authorities deeming a permanent establishment in Germany. These errors can result in substantial additional costs, potentially requiring individuals to pay taxes in both countries without the ability to offset them.

German tax authorities have enhanced their surveillance capabilities, using data such as electricity and water bills to ascertain an individual's true place of residence. Merely residing in Dubai is insufficient if a person maintains a permanent home, uses a German-registered car, or a German mobile phone in Germany. In such cases, German tax authorities may consider business activities to be ongoing in Germany, even if the company is registered in Dubai.

Hörhan emphasizes that the exit tax should not be underestimated. Leaving Germany or Austria for a non-EU country like Dubai triggers a "fictitious sale" of company assets. This deemed sale generates a profit subject to capital gains tax. For sole proprietors or influencers, this can translate into tax liability on up to 13.75 times their annual profit, leading to significant back taxes.

According to Investmentpunk Academy GmbH, the tax situation for many after relocating to Dubai can be worse than remaining in Germany. Thorough planning and understanding of local tax legislation are crucial to avoid costly mistakes.