German Federal Court of Finance („BFH“) ruling of March 20, 2025 – VI R 25/23 Taxation rights for orchestra musicians in public service (Luxembourg)

Key statement

On August 21, 2025, the BFH published the following ruling:

A musician employed by the state-run Orchestre Philharmonique du Luxembourg is considered an “artist” within the meaning of Art. 16 (1) DBA-Luxembourg 2012.

His income is therefore taxable in Germany, but Luxembourg tax is credited even if he physically works in Luxembourg every day.

Background

A musician residing in Germany was employed by the Orchestre Philharmonique du Luxembourg and paid income tax there. The point of contention was whether Luxembourg or Germany had the right of taxation. The plaintiff wanted to obtain an exemption in Germany, but the BFH ruled that the special rule for artists under Art. 16 DBA-Luxembourg 2012 applied to him.

This means that Germany may tax the income, with the Luxembourg tax merely being credited.

Implications for practice

• Artists in public service (Luxembourg) fall under the special rule of Art. 16 DBA-Luxembourg 2012 in many constellations.
• This means: no exemption in Germany, but rather the credit method.
• Employed ensemble members (e.g., orchestra musicians, choir singers) are also covered.
• Employers and employees should check cross-border implications at an early stage. We are happy to assist you.

Please do not hesitate to contact us if you have any questions.

Status: August 25, 2025