Using an Agency in UK but Working in Germany as Freelancer

**cojak** · 16 September 2015, 17:02

Try this thread:
http://forums.contractoruk.com/busin...k-company.html

And this thread: http://forums.contractoruk.com/busin...d-germany.html

And this http://forums.contractoruk.com/busin...g-germany.html

But also read this thread to prevent things from going wrong: http://forums.contractoruk.com/accou...an-cometh.html

**JB3000** · 16 September 2015, 20:53

Originally posted by willquick View Post

Hi All,

I have been trying to find out the answer to this question and no forum seems to quite have the same situation as myself. I am planning on becoming a freelancer in Germany and will work for a Pharam Company. I have got the position through a recruitment agency. I have an accountant and will set my self up as a freelancer when I arrive and pay income tax ... my question comes with whether I need to become VAT registered or not. As I will be technically invoicing the UK agency for the work I do, I have been told:
a) I do not need to,
b) I can't do that.
As I can see some perks and few negatives to being VAT/MSWT registered in Germany my question is should I be invoicing with VAT to UK agency or not. I do not want to get stung with a VAT bill at the end of the year but wouldn't mind writing off the tax of Work purchases like computers ... and keeping a chunk of that money either?

So am I legally obliged to VAT register?
Would I benefit from being VAT registered?

Thanks for any help in advance,

What does your german accountant say?

**BlasterBates** · 16 September 2015, 21:05

Since you are supplying to a German business, German VAT rules apply.

VAT between the UK and Germany

You really need to see a German accountant to sort out the German tax. It is possible that you are below a threshold for paying VAT, if it is a short contract.

It is somewhat complicated in that the agency is in the UK. That's really where you need the expertise of a German accountant.

**JB3000** · 16 September 2015, 21:56

Originally posted by willquick View Post

Hi All,

I have been trying to find out the answer to this question and no forum seems to quite have the same situation as myself. I am planning on becoming a freelancer in Germany and will work for a Pharam Company. I have got the position through a recruitment agency. I have an accountant and will set my self up as a freelancer when I arrive and pay income tax ... my question comes with whether I need to become VAT registered or not. As I will be technically invoicing the UK agency for the work I do, I have been told:
a) I do not need to,
b) I can't do that.
As I can see some perks and few negatives to being VAT/MSWT registered in Germany my question is should I be invoicing with VAT to UK agency or not. I do not want to get stung with a VAT bill at the end of the year but wouldn't mind writing off the tax of Work purchases like computers ... and keeping a chunk of that money either?

So am I legally obliged to VAT register?
Would I benefit from being VAT registered?

Thanks for any help in advance,

Is it just me who thinks this will all end in tears without a decent german accountant?

**SueEllen** · 17 September 2015, 05:15

Originally posted by JB3000 View Post

Is it just me who thinks this will all end in tears without a decent german accountant?

That's why the OP says "I have an accountant...."

**EXPATTAX** · 30 September 2015, 12:26

Originally posted by willquick View Post

Hi All,

I have been trying to find out the answer to this question and no forum seems to quite have the same situation as myself. I am planning on becoming a freelancer in Germany and will work for a Pharam Company. I have got the position through a recruitment agency. I have an accountant and will set my self up as a freelancer when I arrive and pay income tax ... my question comes with whether I need to become VAT registered or not. As I will be technically invoicing the UK agency for the work I do, I have been told:
a) I do not need to,
b) I can't do that.
As I can see some perks and few negatives to being VAT/MSWT registered in Germany my question is should I be invoicing with VAT to UK agency or not. I do not want to get stung with a VAT bill at the end of the year but wouldn't mind writing off the tax of Work purchases like computers ... and keeping a chunk of that money either?

So am I legally obliged to VAT register?
Would I benefit from being VAT registered?

Thanks for any help in advance,

You will not have to register for VAT but you will benefit from it. You will register for VAT, but not charge VAT. I know this sounds odd, but this is the way it is with a cross border transaction in the EU. It will make your setup way more transparant for the German tax office (will avoid funny questions in the future), it will make your setup very clear for your UK based client and last but not least the registration for VAT will allow you to claim input VAT. This means that any German VAT you pay on bills related to your work will be refunded to you. So you will be filing monthly German VAT returns and the tax office will transfer money back into your bank account on a monthly basis, refunding the VAT you paid. With the current German VAT rate at 19%, this will knock off 19% on the purchase of work related IT equipment, travel expenses, restaurant receipts for client entertainment, possibly also the purchase of a company car, etc.

**Magpie252** · 30 September 2015, 18:19

Originally posted by EXPATTAX View Post

With the current German VAT rate at 19%, this will knock off 19% on the purchase of work related IT equipment, travel expenses, restaurant receipts for client entertainment, possibly also the purchase of a company car, etc.

For an accountant your math's aren't very good are they?

If the German tax rate is 19% then the OP can knock off 16% on allowable expenses.

For the OP, this poster keeps commenting on German tax regs, then disappearing for weeks, for me jury is still out as to their competence on the subject

Using an Agency in UK but Working in Germany as Freelancer