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  1. #471

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    Quote Originally Posted by EXPATTAX View Post
    Hi there,

    I guess it depends on what exactly you mean with "similiar proceedings", but we have been dealing with cases in the UK, France and Spain. The local tax offices in those countries acted on behalf of the Germany tax office via the MARD system (mutual assistance), tracked down people who owed taxes in Germany and assisted in collecting outstanding tax money. So, these kind of proceedings certainly do take place.

    Hope this helps.

    Thomas Zitzelsberger - expattax.de

    I guess what concerns me whether other than German governments are already known to employ that procedure where they contact end clients and possibly agencies for the sole purpose of tracking down IT contractors. This is the gotcha when the government stars talking directly to end-clients.


    Lets face it if Germany is doing it, sooner or later every other government will try to do it, they just need to catch up technologically and organizationally. Which to some other EU countries may mean 20 - 40 years .... maybe less. I am not sure where the mid-level countries : Belgium/Netherlands/Scandinavians/etc stand on this re tracking down IT contractors.


    I am aware of more and more EU countries's Revenue Agencies getting technologically connected to the corresponding agencies in other countries for the purpose of exchanging information on who worked where. That is to track who paid taxes where.

    So these investigations are only beginning to ramp up. Soon there may be no place to hide. And if then they ask your son to pick up a gun and go to war with someone. Tell him "sorry son, I had go along with it all".

    And please don't use the word taxman. I don't see anything masculine about this system.
    Last edited by newblood; 10th September 2015 at 12:33.
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  2. #472

    Some things in Moderation

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    Quote Originally Posted by newblood View Post
    I guess what concerns me whether other than German governments are already known to employ that procedure where they contact end clients and possibly agencies for the sole purpose of tracking down IT contractors. This is the gotcha when the government stars talking directly to end-clients.


    Lets face it if Germany is doing it, sooner or later every other government will try to do it, they just need to catch up technologically and organizationally. Which to some other EU countries may mean 20 - 40 years .... maybe less. I am not sure where the mid-level countries : Belgium/Netherlands/Scandinavians/etc stand on this re tracking down IT contractors.


    I am aware of more and more EU countries's Revenue Agencies getting technologically connected to the corresponding agencies in other countries for the purpose of exchanging information on who worked where. That is to track who paid taxes where.

    So these investigations are only beginning to ramp up. Soon there may be no place to hide. And if then they ask your son to pick up a gun and go to war with someone. Tell him "sorry son, I had go along with it all".

    And please don't use the word taxman. I don't see anything masculine about this system.
    This thread is for specific German tax queries, not a general European tax debate.

    I suggest that you start a fresh thread if you want to discuss the possible future tax implications across the EU.

  3. #473

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    Quote Originally Posted by cojak View Post
    This thread is for specific German tax queries, not a general European tax debate.

    I suggest that you start a fresh thread if you want to discuss the possible future tax implications across the EU.
    As you wish honorable lady. Here it is http://forums.contractoruk.com/accou...ml#post2142098
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  4. #474

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    newblood's edit put a very different slant on the post.

    Originally it asked how people fared out of the German investigations.

    I would love to hear how things worked out if people would share.
    What is the difference between ignorance and indifference? Don't know and don't care.

  5. #475

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    Default My case continues - now at the Bundesfinnzhof (highest financial court)

    In my case:

    I worked in Germany on a contract basis for 3 years in 2005 through PSB as recommended by the agent. This was my first contract role after being in a permanent job for 3 years since graduation. At the time, I was not aware of the process. I have declared and paid the taxes in Germany for the salary received from the management company.

    In 2012, I have received a letter to my home address in the UK from the Tax office in Germany demanding for further tax payments for around 90,000 Euros, this includes interests + penalties and stating that, I evaded taxes. This demand was based on the invoices for the amount paid from the source (firm based in Germany to the agency based in the UK). I was not aware of the actual payment received by the agency in the UK. This amount / daily or hourly rate was not revealed towards me by the agents or the source company.

    Once, I have received the demand letter, I contacted a tax expert in Germany, I was advised that we could appeal, however the allowed time limit has elapsed, since the original letter was sent to my German accountant and not me, the time limit of 1 month starts from the date that the letter was sent to the accountant. Apparently, the account did not contact or forward me the letter.

    Current status:
    - Criminal proceeding conviction removed by the criminal court with a penalty reduced to 30% and I have paid by instalments.
    - Tax proceeding continues - Case rejected at the tax court, they stated it's a fault of my accountant for not informing me of the tax demand, letters, etc. So, we logged an appeal at the Bundesfinnzhof (highest financial court) for further proceeding. There are number of similar cases are already logged and waiting for decision as per my lawyer.
    - Logged a compensation case against my accountant for her fault, as she acknowledged her mistake was due to she was out of the office, illness, but she has now appealed.

    Very tough situation, it's costs quite a lot of money for the procedure. I will not ever consider contracting outside of UK, apart from Middle East and Asia.

    Please update me if anyone is going through similar issues.

  6. #476

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    Quote Originally Posted by EXPATTAX View Post
    Hi there,

    I guess it depends on what exactly you mean with "similiar proceedings", but we have been dealing with cases in the UK, France and Spain. The local tax offices in those countries acted on behalf of the Germany tax office via the MARD system (mutual assistance), tracked down people who owed taxes in Germany and assisted in collecting outstanding tax money. So, these kind of proceedings certainly do take place.

    Hope this helps.

    Thomas Zitzelsberger - expattax.de
    I have been offered a contract by a non German entity which is not in any way registered in Germany. They want to set up and office and employ local staff in Bavaria of all places. I have decided to register myself as a freelancer/contractor (awaiting final legal advice on this) to keep myself out of trouble.

    What is going to happen to the non German entity if the tax authorities find out and raid the office? I expect their local workers will be hired as ''consultants" and none of the usual rules followed. From what I have read being outside Germany is no protection to being pursued for a tax liabilty, does the same apply for fines, can they be fined for Schwarzarbeit and the fine enforced if they do a runner from Germany?

  7. #477

    Still gathering requirements...


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    Quote Originally Posted by blagtrip View Post
    I have been offered a contract by a non German entity which is not in any way registered in Germany. They want to set up and office and employ local staff in Bavaria of all places. I have decided to register myself as a freelancer/contractor (awaiting final legal advice on this) to keep myself out of trouble.

    What is going to happen to the non German entity if the tax authorities find out and raid the office? I expect their local workers will be hired as ''consultants" and none of the usual rules followed. From what I have read being outside Germany is no protection to being pursued for a tax liabilty, does the same apply for fines, can they be fined for Schwarzarbeit and the fine enforced if they do a runner from Germany?
    Hi blagtrip,

    I wonder did you take the contract and how are things developing?

    You were asking about the enforcement of taxes and penalties. As long as you are within the EU both will be enforced. So indeed being outside of the country is no protection. Outside of the EU it gets obviously a bit more difficult for the German authorities to enforce their claims. You could say that it gets increasingly difficult for them the further away you are.

  8. #478

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    Default stand up & fight

    Note: everyone is talking about dealings with German Tax man... NOT the Dutch or Spanish tax man... Only way is to fight German Tax man - No other option. A Clement Attlee type appeasement only makes the monster bigger & more dangerous.

    As a project manager for firms in Austria & Netherlands I have come across over 2 dozen German contractors working as German Freelancers & one woman who still works in in Austria has done so through a company in the south of Munich since 2009 & not even registered in Germany... yet her freelance wages are all done in Germany... now try that with a UK Ltd company & you can be sure what the German tax man will be after.

    It is a shame so many have caved in so easily... any German accountant or lawyer would only act for & on behalf of the German state... The honourable thing to do would be to point out how they have violated the Lisbon treaty etc. I am trying hard in fighting them & if you are willing then join me.. the more the better. We trying to get to the ECJ through a direct method & have a brilliant German educated English barrister based in Canary Wharf ......... the normal route through a German lawyer & German courts to ECHR is not available because.. well no German likes to challenge the state... Deutschland über alles & all that..

    what they refuse to realise is that this covering for the state is what gave them the biggest monster in Human History the NAZI's (ooops one should not say that word... better say National Socialist) followed by the Satzi... & now it would seem in Finazis..,. but I guess there is no getting through to some people.... or like the Internet Cafe owner in Soldiers Point in NSW told me as he came up to me & asked what I thought of the Germans .. before I had a chance to reply he said "mean & greedy people"....... hard words to swallow given my wife is German... but so very true!

  9. #479

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    Quote Originally Posted by happyradio View Post
    Note: everyone is talking about dealings with German Tax man... NOT the Dutch or Spanish tax man... Only way is to fight German Tax man - No other option. A Clement Attlee type appeasement only makes the monster bigger & more dangerous.

    As a project manager for firms in Austria & Netherlands I have come across over 2 dozen German contractors working as German Freelancers & one woman who still works in in Austria has done so through a company in the south of Munich since 2009 & not even registered in Germany... yet her freelance wages are all done in Germany... now try that with a UK Ltd company & you can be sure what the German tax man will be after.

    It is a shame so many have caved in so easily... any German accountant or lawyer would only act for & on behalf of the German state... The honourable thing to do would be to point out how they have violated the Lisbon treaty etc. I am trying hard in fighting them & if you are willing then join me.. the more the better. We trying to get to the ECJ through a direct method & have a brilliant German educated English barrister based in Canary Wharf ......... the normal route through a German lawyer & German courts to ECHR is not available because.. well no German likes to challenge the state... Deutschland über alles & all that..

    what they refuse to realise is that this covering for the state is what gave them the biggest monster in Human History the NAZI's (ooops one should not say that word... better say National Socialist) followed by the Satzi... & now it would seem in Finazis..,. but I guess there is no getting through to some people.... or like the Internet Cafe owner in Soldiers Point in NSW told me as he came up to me & asked what I thought of the Germans .. before I had a chance to reply he said "mean & greedy people"....... hard words to swallow given my wife is German... but so very true!


    In my case, the German tax authorities has the invoices from the UK based employment agency to the source company in Germany for their consultancy agreement on behalf of me.
    I have declared and paid German taxes for the amount received into my bank account and as per contact between me and the UK based agency.

    The German tax authorities are imposing tax liabilities (principle + interests + penalties) on me for the remaining balance pocketed by the UK based employment agency. As per current German income tax laws, this is allowed. Hence they are allowed to enforce the tax debt through the EU Mutual Assistance Regime, and the requested authority has no right to clarify the validity of the tax debt. It's only the applicant authority German is allowed to accept any disputes of the claim. Trust me it's not easy to deal with the German tax authorities.

    Take a look at the recent bankruptcy case in the UK for a German tax debt
    Bankruptcy orders and the mutual assistance regime—Revenue and Customs Commissioners v Smart


    Take a look below from a German legal representative;

    Previous decisions in similar cases:
    The tax authorities or civil courts decision follows almost invariably the tax jurisdiction in similar cases. In our estimation, which specialises in the assessment of tax law in fiscal court litigation, the relevant current case law of the tax courts tends in the direction, to attribute the payments of principals (in this case the source company Germany) to employment agencies abroad completely to the contractor (you) in matters of income tax law.

    This approach of the courts is legally vulnerable, but unfortunately it corresponds to the previous practice of the tax courts. Since the civil jurisdiction - as explained above - depends primarily on the recent decisions of the tax courts - are the chances of success in your case, therefore, low the moment. This would be different if a leading decision of the Supreme Fiscal Court (Bundesfinanzgerichtshof) would change this previous judgement practice. Such a decision has not yet been issued and is still pending.

  10. #480
    SRJ
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    Default My Turn

    Hi All,

    I'm currently going through the same issue mentioned on this thread.
    I received letters and responded to them denyong their claims.
    The tax authorities only have one invoice showing an amount that was paid to the UK agency that employed me, from the German source.
    Based on this I went to a criminal court already where I was found not guilty within 10 mins. The tax authorities and pitifully thin evidence and fabricated it where it didn't exist, which I was able to prove with undisputible facts.
    However, the tax authorities have still decided to persue me for tax relating to an "assumed" 250,000 euros over a two year period (even though it was actually only 18 months).
    According to my German tax lawyer (Mr. J. H), the case will go before the civil tax court next week and I will certainly lose.
    I very dissapointed and quite distraught about this as previously, my german tax lawyer had always told me that I had nothing to worry about and I was completely safe and I would certainly win adn in the strongest position....... bla..bla....

    Anyway, Im now seeking ay advice on what I should do:

    1) with respect to my legal representation? Do I stick with my German lawyer who appears to be a bit of a let down.... or do I change to someone else? or is it too late? ... Any recomendations are welcome.

    2) What to do to protect my assets and try to secure some kind of finacial future for my wife and children who weren't even part of my life when this occured 12 years ago:
    - I currently live in France and own property there (our home) together with my wife
    - I have a house in the UK which is rented out with the deeds and a mortgage account in my name
    - I have a vehicle which is registered in the UK

    Any advice would be really appreciated.

    Still can't belive this is happening.

    - only 18 months in country
    - I was a junior contractor back then and it was my first contract abroad
    - there is no "actual" evidence against me - they are just making assumptions
    - I won the criminal case hands down
    - now they're looking for an amount which could be between 200 to 250 thousand euros to settle the demands of their assumptions


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