Working in Germany

[expat]

I see loads of stuff in that thread about Germany ..... what if I look at it from the start? I live in the UK and that will remain so. What if I now get a contract in Germany? What is the safe and efficient way of handling it?

I just want a simple life, no risky stuff. But no unnecessary huge chunks of my hard-earned income to payroll companies if I can avoid it.

Is there an obvious way to work it?

[TiroFijo]

I see loads of stuff in that thread about Germany ..... what if I look at it from the start? I live in the UK and that will remain so. What if I now get a contract in Germany? What is the safe and efficient way of handling it?

I just want a simple life, no risky stuff. But no unnecessary huge chunks of my hard-earned income to payroll companies if I can avoid it.

Is there an obvious way to work it?

I think the consensus is to give the fatherland a wide berth!

[BlasterBates]

It isn't a problem, but operate as if you were a German. A freelancer is the best way. It isn't a problem, if you use a local accountant. There is no advantage in using a company, and indeed if you do you become liable for Gewerbesteuer, in addition the cost of keeping accountants is higher.

The main thing to avoid is Sozialversicherung. But note...this is not a tax, no Finanzamt officials are going to bash your door down if you avoid it, this is handled by the Pensions Authority, and could be a problem several years down the line, but certainly not in the short term.

It is possible that the Finanzamt might demand Gewerbesteuer (business tax) extra 10% if they challenge your work as not being comparable with of a n engineer, but that's about it in terms of short-term risks.

The horror stories you hear are as a result of incompetent management co's taking advantage of contractors who want an easy solution. Keep clear of them.

[Fred Bloggs]

Maybe working as a Freiberufler (sp?) is the best way, but how would a UK agency even begin to understand that? Assuming it is a UK agency that is offering the job of course. IME, UK agencies simply deal with brollies or Ltd Co's and are blind to anything else?

I readily admit, I have been put off European work because of the mess and uncertainty it always seems to involve. Why oh why can't our politicians work out a simple, single tax structure for working across borders in the EU?

[expat]

Maybe working as a Freiberufler (sp?) is the best way, but how would a UK agency even begin to understand that? Assuming it is a UK agency that is offering the job of course. IME, UK agencies simply deal with brollies or Ltd Co's and are blind to anything else?

That's a concern. So I get a 3-month contract in Germany through a UK agency: do I sign the usual UK Ltd Co contract with them, and then go and see a German accountant?

And then how do the UK authorities like me paying all that tax to Germany, since I am still resident in the UK?

[Pondlife]

That's a concern. So I get a 3-month contract in Germany through a UK agency: do I sign the usual UK Ltd Co contract with them, and then go and see a German accountant?

And then how do the UK authorities like me paying all that tax to Germany, since I am still resident in the UK?

For three months I wouldn't bother with the paperwork.

Big companies send consultants from the UK to Europe all the time.

Invoice UK Agency through UK Co and just turn up. What's the problem?

[expat]

For three months I wouldn't bother with the paperwork.

Big companies send consultants from the UK to Europe all the time.

Invoice UK Agency through UK Co and just turn up. What's the problem?

3 months becomes 6, then 12, then 18...... do you walk out of a good contract just because you hadn't planned for it at the start?

[Pondlife]

3 months becomes 6, then 12, then 18...... do you walk out of a good contract just because you hadn't planned for it at the start?

If you don't break the 183 day rule I'd stick with it.

[expat]

If you don't break the 183 day rule I'd stick with it.

You would certainly break the 183-day rule: that's only 37 working weeks, about 9 months. Even at that, isn't that just hoping you don't get caught (which is not really what I'm after)?

[BlasterBates]

That's a concern. So I get a 3-month contract in Germany through a UK agency: do I sign the usual UK Ltd Co contract with them, and then go and see a German accountant?

And then how do the UK authorities like me paying all that tax to Germany, since I am still resident in the UK?

If it is 3 months your Ltd won't be deemed to have a pemanent branch therefore would run through your Ltd on the British tax system.

If you overstay longer than 6 months you become tax resident in Germany, and effectively you are a German employee. At that point you need to establish a branch. This is not tax effective though.

You have the option of billing the agency direct from Germany in your own name. You then follow the cross-border VAT rule (check with a German accountant). In germany as a freelancer there is no registration you just simply declare the income as self-employed.

If you are there longer than 6 months this is what you should do.

If you do use a management co. make sure you are setup as a "Freiberufler". I think some of them do this now. Avoid being an employee, split income etc. But then you get charged twice, once from the UK co and a charge from the German tax advisor, so it's cheaper to get a local accountant.

If you have German taxed income, you declare this to the UK authorities as such, and make sure it isn't taxed again or using credits as it shouldn't be. They sometimes try this on.