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  1. #21

    BardLike

    AlfredJPruffock's Avatar
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    have learnt this morning that 2 British contractors have been arrested this week and are currently in German custody because they cannot pay the 6 figure bail / kaution.

    If true - that is appalling.

    Have they contacted their Euro-MPs ?

    They must be released at once and extradited.

    This whole affair smacks of heavy handed Nazi tactics.

    How dare they imprison Brits.
    Last edited by AlfredJPruffock; 12th December 2008 at 10:25.

  2. #22

    Double Godlike!

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    Quote Originally Posted by Alter_ego View Post
    Same here.

    If everything is declared 100% inside Germany as a Freelancer: what is the tax liability ?

    I've heard I'll keep between 45% and 65% ????
    Normally the tax rate is around 30-35% not more though. You should operate as a freelancer in Germany. This is the most tax efficient method. You should also use a registered German tax advisor. Never use a UK based tax advisor because you have no recourse.

    The only questionable point is Sozialversicherung. Your tax advisor will help you on this point and it is not a tax, so if it is demanded normally no penalties. Worst case would be EUR 500 a month, 4 years retrospectively. But it is unlikely they would check this unless you'd be working for several years.
    Author of the best seller "How to get Poor quickly"

  3. #23

    Double Godlike!

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    Quote Originally Posted by LonelyRider View Post
    I am in this tricky situation now. I have been contracting in Germany for a few years, using one large UK based management company.

    I have recently got warning emails and paper letters from my German accountant urging me to refile taxes for the past years and pay taxes for all incomes. According to them it is possible and a sure way to avoid criminal prosecution. The letters have claimed that the authorities are systematically going through the records of all IT contractors.

    However, I am very concerned about the situation. The info I am getting from my accountant is not straight forward and clear. I had the feeling that maybe also the management company and the German accountant (who is a partner of that management company) somehow want to secure their own positions in this mess and do not necessarily give advise, which is really the best possible for the contractor. As one poster said, there is no reliable information about the matter available. The scary stories about prosecution, arrest warrants etc. are going around, but I have never heard about any real criminal case and what happened to the contractors either from the news or other sources. So it is impossible to know, how bad the situation really is.

    I have not decided, which steps to take now regarding this matter. I am considering refiling, but I would like to do it correctly and be really sure that the matter is then solved.

    I agree with the earlier posters that those contractors, who have stayed in Germany for very short times, about 6 months, probably have no need to worry.

    At the moment I am just very frustrated, as I should have started with the local freelancer status and done everything correctly, as it is also quite a good deal taxwise in comparison with a normal employee status in Germany. Using management company has just brought troubles.

    Feel free to PM me, if you want to discuss this matter.
    Yes if you go to the authorities yourself you will not be prosecuted. You will pay penalties, about double I believe.

    If you've squirreld away more than EUR 50,000 you will be prosecuted and get a criminal record. Arrest warrants would be issued.
    Author of the best seller "How to get Poor quickly"

  4. #24

    Should post faster

    LegendsWear7's Avatar
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    Quote Originally Posted by BlasterBates View Post
    Yes if you go to the authorities yourself you will not be prosecuted. You will pay penalties, about double I believe.

    If you've squirreld away more than EUR 50,000 you will be prosecuted and get a criminal record. Arrest warrants would be issued.
    Is that a fact ? No matter what ?

    That's not what I've been led to believe. I've spoken with some 'professionals'. Coming clean is what they all recommend but they don't mention double penalty.

    Something I discovered.

    There is self-declaration that applies for the open tax year, i.e. 2007.
    Penalties can apply.
    Then there is self-accusation, a different category that applies for earlier years. This is treated more seriously.


    If over 100K then since a Mannheim decision: jail is on offer.


    Weekend = thinking time.

    Monday: I intend to identify and contact a quality accountant / adviser to find the best solution but I guess this means pay pay pay. No home for me.

  5. #25

    Still gathering requirements...


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    Quote Originally Posted by LegendsWear7 View Post
    Is that a fact ? No matter what ?

    That's not what I've been led to believe. I've spoken with some 'professionals'. Coming clean is what they all recommend but they don't mention double penalty.

    Something I discovered.

    There is self-declaration that applies for the open tax year, i.e. 2007.
    Penalties can apply.
    Then there is self-accusation, a different category that applies for earlier years. This is treated more seriously.

    I have been told the same, ie there are no high penalties involved in self-accusation (Selbstanzeige), one must just pay the back taxes plus an interest of 6% pa. The high penalties will apply, should one be prosecuted and convicted.

    Self-declaration is possible for open tax years. I have actually done it once. It actually means just filing ones tax returns late. I did not have any penalties. I was told the penalty in this case was the fact that late filers can only pay tax, but they cannot get any refunds, if they had paid too much.

    I have learned the time is a major issue here. If the investigation has been started, self-accusation is no longer possible. It also applies if one's tax accountant is being investigated.

    I am looking fo a good tax accountant at the moment as well. I just do not feel comfortable sending any more documents to Mr H's office.

  6. #26

    Should post faster

    LegendsWear7's Avatar
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    Quote Originally Posted by LonelyRider View Post
    I have learned the time is a major issue here. If the investigation has been started, self-accusation is no longer possible. It also applies if one's tax accountant is being investigated.
    !! This concerns me. !! Mr H is definitely being investigated. Allegedly facing 12 years if the allegations are confirmed.
    If it is the case that self-accusation is no longer possible then one may as well do a runner: same result if caught

    Quote Originally Posted by LonelyRider View Post
    I am looking fo a good tax accountant at the moment as well. I just do not feel comfortable sending any more documents to Mr H's office.
    Me too. Please PM if you find something. Mr H has had enough of my money and I can imagine he is rather busy at the moment when I need his full attention on my affairs not his own problems or hundreds of other contractors.

    Does anyone have an estimate on how much the process (new estimates and re-filing) costs ? My tax affairs are actually really simple. One source of income. No assets or investments. So I don't want to spend thousands on what I could possibly do myself.

  7. #27

    Nervous Newbie


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    I've been following the story with interest, but how are they finding out. Normally an accountant would only keep records of what he has been told, in other words if the client/contractor is only telling accountant one amount, yet he is earning another amount, then the accountant won't know whats going on, so how can the taxman say otherwise.

  8. #28

    More time posting than coding


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    I worked in Germany for 10 months or so.
    It was through a management co, and it was the kind of split income arrangement described. Maybe naively I thought that it was all above board as it had been recommended by my agent as being so.

    Fortunately as I needed the readies most of the fee was declared to Finanzamt (self employed status). I was in Germany approx 4 days a week (home worked on Fridays) so about 170 days in Germany in total. (I worked with other people who didnt register and paid no tax in Germany whatsoever). The remainder was invested overseas and paid as distribution of profit which I declared in the UK and paid tax on. I had no idea I might be doing anything illegal. The end client was an International recognised name.

    My accountant doesnt sound like the one described here.

    All this happened 2 years ago and I've heard nothing and actually received a tax refund recently for overpayment. Am I at risk here?

  9. #29

    Fingers like lightning


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    ..
    Last edited by Olly; 16th January 2013 at 19:19.

  10. #30

    More time posting than coding


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    Quote Originally Posted by Olly View Post
    Why did you do that?
    I'm in the same boat and just use my UK Ltd. The end client has no problems paying invoices from a UK agency. Actually, their contract is not with the end client's GmBH, but instead their UK offices.

    is there anyone who can answer my question without a lecture,
    my agent said I had to thats why, he was wrong, but I needed the work and went with it

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