In case of most international business relations, Germany and the respective other jurisdictions have concluded a double tax treaty (Doppelbesteuerungsabkommen) in order to determine the right of taxation as well as the avoidance of double taxation. If your main tax residency is in Germany, Germany (in most cases) has the first right of taxation on your investment income. Unless Germany has a specific bilateral agreement relating to the investment account, any income received is generally taxable in Germany, even though it is tax-free in the country of origin. Filing a German tax return in that case is mandatory. Depending on your personal situation and investments, there might, however, be (substantial) tax breaks available in Germany.

Whether Germany or the jurisdiction of your foreign employer has the first right of taxation depends on several personal factors as well as the specific nature of your contract and can also change from one year to the other. 

Should your employer incorrectly withhold taxes in the wrong jurisdiction, you might be liable to file a return and correct the situation. Substantial penalties might be imposed by the German tax authorities, if they notice incorrect withholdings were made prior to you taking any corrective measures.

Not only could the fact that you physically work from Germany result in that income being taxable in Germany (including German payroll obligations), but the physical presence in Germany might also lead to the establishment of a branch of the company in Germany. This would lead to a variety of tax compliance obligations as well as associated tax payments and potential penalties in Germany.