Art 15 para 1 Tax Treaty with the United States establishes the general rule as to the taxation of income from employment, namely, that such income is taxable in the state where the employment is actually exercised. Only few exceptions apply. Regarding unused holidays, the Federal Fiscal Court had to answer the question whether some remuneration in this respect has to be allocated to the resident state or the source state after a change of residency of the employee. The court decided how to deal with this remuneration payment during the notice period of an already terminated employment. As to a contract of secondment, the court analyzed why the respective payment should be considered to derive from the “exercise of employment" in the source state. In this recent case, the principle of causality and the general principle of activity was applied over the world income principle.
