UK Contract, German Residency

[WFH]

Hi, First post here after some searching and still being non the wiser.

Currently, I have a UK Limited Company, contracting via a UK Agency, to another UK Company, paid in GBP into my companies UK Bank. This contract requires me to spend a significant amount of time in Czechia. I recently took the decision to move to Germany and attempted to end the contract with the UK company, as I would no longer be able to work in their Czech plant.

However, they have agreed that I do not need to be physically on site in CZ and I am free to remote work at my home office in Germany, with 1 week per month based in CZ. (For now, I am ignoring any CZ tax implications as I am there for less than 183 days...)

My question is, can I continue to operate solely out of the UK even though I am remote working from my home office in Germany?
I would like to claim German residency (because brexit) and plan to stay there for several years. What I need help understanding is how do I go about paying German Tax liabilities, such that I may become permanent resident in Germany should I wish in 5-10 years? Can my UK company continue to operate as normal and I invoice it from Germany for 3 weeks per month 'German working' at any hourly rate? If this is possible I assume I would either have to be self-employed in Germany or create a German 'sister-company'.

I move to Germany next week and will ofcourse find an accountant that knows UK/DE systems inside out to help facilitate this, I am just searching for some knowledge before hand.
To add to the confusion, the CZ site has also offered me perm employment in CZ, whilst still being a remote worker.

TL/DR, I am looking for a tax efficient way of residing in Germany, working remotely for a UK company.

Any help or advice would be greatly appreciated.

Thanks in advance

[BlasterBates]

If you are moving to Germany then you need to register and tax yourself in Germany even if the contract is with a UK company as you will actually be working in Germany. To get permanent residency you will need to be there for 5 years, otherwise you will probably get a temporary work visa. You will have to apply for that straight away particularly as the UK is possibly going to crash out of the EU; they will expect a contract and proof of your earnings.

The most tax efficient way to work in Germany is as a "Freiberufler", any accountant will handle it for you.

[WFH]

Hey, thanks for the quick reply.

Registering and taxing myself in Germany is fine, I was confused over the 'working' in Germany part as technically it's all computer based / cloud based data analysis so I could be doing it from anywhere in the world, but fair enough.

The permanent residency is not an issue at the minute, I am still technically an EU citizen so when I arrive next week I will be opening a bank account and going to apply for a residency permit (even though strictly not required) ahead of the fiasco that is Brexit. I just don't want to shoot myself in the foot should I want a permanent residency in 5 years time and have absolutely no proof of earnings or tax paid in Germany.

The temporary residency permit whilst should be easy due to still being in the EU, may be difficult if I do need to show a contract as it is obviously a UK thing. I am told from others whom have moved to the area that they did not have to show proof of employment or contracts at all - bank account and rental contract and it was granted.

I shall look into Freiberufler and speak to an accountant, could I operate as a Freiberufler and invoice my UK company or would that require my UK company to be AUG registered and all the red tape that goes with it?

Thanks

[BlasterBates]

Hey, thanks for the quick reply.

Registering and taxing myself in Germany is fine, I was confused over the 'working' in Germany part as technically it's all computer based / cloud based data analysis so I could be doing it from anywhere in the world, but fair enough.

The permanent residency is not an issue at the minute, I am still technically an EU citizen so when I arrive next week I will be opening a bank account and going to apply for a residency permit (even though strictly not required) ahead of the fiasco that is Brexit. I just don't want to shoot myself in the foot should I want a permanent residency in 5 years time and have absolutely no proof of earnings or tax paid in Germany.

The temporary residency permit whilst should be easy due to still being in the EU, may be difficult if I do need to show a contract as it is obviously a UK thing. I am told from others whom have moved to the area that they did not have to show proof of employment or contracts at all - bank account and rental contract and it was granted.

I shall look into Freiberufler and speak to an accountant, could I operate as a Freiberufler and invoice my UK company or would that require my UK company to be AUG registered and all the red tape that goes with it?

Thanks

Invoicing your Ltd company should be no problem I would say, this would be legitimate given the customer is in the UK. I would however advise not leaving any profit in the UK company as you will be working exclusively in Germany and therefore all profits should be taxed in Germany. The UK company should have 0 profit.

The simplest way would be to invoice direct as a "Freiberufler".

[darmstadt]

For an EU citizen there is no need for a residency permit however due to the Brexit fiasco certain states are giving them out depending upon the length of time you have been in Germany however this varies from state to state, you may have some difficulties as you are moving to Germany now. I suspect that they are going to want to see some paperwork, in particular in regards to finances ans social payments. You will pay tax in Germany if you are resident in Germany and working in Germany, regardless if your work environment is 'virtual.' I primarily work remotely in the USA but pay tax and everything else here. As for the Freiberufler status, you will need to prove this to the Finanzamt otherwise you will end up as Selbstständig and be liable for Gewerbesteuer, only a Steuerberater can help you there.

[Mani4k]

Hello,

I think my question would be quite similar to author of this thread. I have been working for UK company for few years as employee and PAYE (100% remote work). Last year I moved permanently to Poland and according to my research I'm now tax resident in there. My client offered me a contract where I would work for them on B2B basis. They offered this solution in relation to me not being UK tax resident anymore. My question is: is it ok from UK law perspective for me to leave my current employer officially say on 31st of December and start working for him on 1st of January running my own company in Poland and issuing invoices for my work ? I'm confident it's ok PL side but my employer thinks there should be some cool down period to be ok with UK law Any help much appreciated. Thank you

[BlasterBates]

Hello,

I think my question would be quite similar to author of this thread. I have been working for UK company for few years as employee and PAYE (100% remote work). Last year I moved permanently to Poland and according to my research I'm now tax resident in there. My client offered me a contract where I would work for them on B2B basis. They offered this solution in relation to me not being UK tax resident anymore. My question is: is it ok from UK law perspective for me to leave my current employer officially say on 31st of December and start working for him on 1st of January running my own company in Poland and issuing invoices for my work ? I'm confident it's ok PL side but my employer thinks there should be some cool down period to be ok with UK law Any help much appreciated. Thank you

If you do the work in Poland remotely with occasional visits this is no problem, there are no implications as you won't working under UK law.

If you travel and work in the UK then this is a problem, and you would have to tax your earnings in the UK even if you spend less than 183 days in the UK. Non-residents are liable for tax on income earned in the UK. Legally when you work in the UK, earnings are classed as UK income even if you invoice through a Polish company.

[Mani4k]

If you do the work in Poland remotely with occasional visits this is no problem, there are no implications as you won't working under UK law.

If you travel and work in the UK then this is a problem, and you would have to tax your earnings in the UK even if you spend less than 183 days in the UK. Non-residents are liable for tax on income earned in the UK. Legally when you work in the UK, earnings are classed as UK income even if you invoice through a Polish company.

Thanks, for info. I plan to work from PL only and possibly for more than one client. My question is more about my employer liability. I try to convince them that if I officially leave (stop being PAYE employee) on say 31st of December I can start working for them as polish contractor (self employed in PL) on 1st of January as any of UK law like IR35 would not apply to us in this situation. I'm I correct ? Is there any government site where such things would be explained ?

[BlasterBates]

Thanks, for info. I plan to work from PL only and possibly for more than one client. My question is more about my employer liability. I try to convince them that if I officially leave (stop being PAYE employee) on say 31st of December I can start working for them as polish contractor (self employed in PL) on 1st of January as any of UK law like IR35 would not apply to us in this situation. I'm I correct ? Is there any government site where such things would be explained ?

For you there are no implications, however for the client there is the problem that they can't control where you do the work, so if you were to return to the UK they would potentially have a problem with the new legislation. I don't think anyone here has the expertise to definitely say there is no problem, cross border working is always complicated. You could ring up the some government dept and get some advice.