Contracting in Germany

[Olly]

Yes, it will be exactly as if you were working for a UK based end client except that:
a) you almost certainly won't charge VAT
b) reclaiming the VAT on German purchases is a a pain in the butt

[chef]

why would i not charge VAT if I am providing a service for a uk based end client?

[engineer]

When you work for and bill to your local UK service provider, you will pay of course UK VAT.

If you bill directly to Germany, you can leave away any VAT if you own a european VAT number, where I am not 100% sure if this is realy required, since I used to work for austria already, and billed without VAT but did not have such a number.

[Olly]

"german based end client" "providing services in germany"
That's why you won't charge VAT....or at least that's what my lot (agent and accountant have told me)

[BlasterBates]

Originally Posted by chef

similar questoin:

im looking to contract in germany for 3 months, the contract is between my limited and a uk based agency but the work that will be provided is for a german based end client meaning i will be living and providing services in germany, returning 1 or 2 times per month.

As i understand it, as long as my contract is between myco and the uk agency then where i work is irrelevant.. is that correct?

No not true. If you work in Germany then you can work for up to 183 days. You then need to register with the German authorites. Double check VAT, as it it is a common cause of problems, particularly as your end client is in Germany. The fact that you're in a country means you pay tax there normally.

[dang65]

Why do these threads always have people completely contradicting each other, but all apparently equally confident that they are right?

I'm starting a contract in Germany next month so I read through this thread with interest and have ended up with no idea of what the actual rules are.

I've got a UK Ltd Co, working for German end client via UK based agency and don't expect to go over 6 months. Will probably use hotels and fly back every other weekend for a few days at home. Probably do some work from home as well, depending on client's policy.

Do I really need to register in Germany and pay any kind of German taxes in a situation like that?

[The Lone Gunman]

The reason it is so confusing is because there is no central source for advice. We are all reliant on what our chosen advisors tell us and they usualy have some agenda of their own.

IANAL. I am not qualified to give this advice.

If you are a UK company contracted to a UK agent then you have to charge VAT no matter where the end client is. The VAT charged by the agent to the client is non of your concern.

The 183 day rule applies in Germany HOWEVER, Germany does not recognise the UK 1 man Ltd set up. They do not treat it as equivelant. They apply some rules for business and others for employees.
They will regard your company as tax resident from day 1 if you are the sole director as your companies seat (that is its control) is where you are. There is no 183 day rule for companies. As you are an employee of that comapny and it is resident then you are resident from day 1 also.
This interpretation is not always used and you may get away with it.

You are required by law in Germany to register with your local "gemeinder" (sp) which lets the local authority know you are here. You are also required to register for an equivelant of a German ID card which is an "aufenthlatserlaubnis" (sp), this process will get you a German tax number and rate. Both of the above require a German address so if you are hoteling and travelling home you can avoid these on that basis. Once you start the registration process the next authority in line will come looking for you if you dont follow the rules.

It is possible not to register. However... Without a tax number you can not (usualy) get tax advice localy. You could end up on the wrong end of a large German tax bill.

The German tax man had a purge on unregistered non tax paying contractors a couple of years back. The German tax man can chase the money back up the chain. It cost clients a lot of money so many of them now require you to set up properly. It took out a few agents, bankrupted them, so they are a bit timid (if they know the score). It also bankrupted a couple of contractors and cost one his freedom I believe though can not prove.

Best advice is to sign up with a management company (though this is no garauntee of legality) or go with an AUG licenced company (look it up) but take home less money.
OR sweat it out and hope you dont get caught.

[Fred Bloggs]

IMO, the hasssle and uncertainty of working in the EU "single market for goods and services" is so huge and complex that it simply isn't worth doing it.

[The Lone Gunman]

Originally Posted by Fred Bloggs

IMO, the hasssle and uncertainty of working in the EU "single market for goods and services" is so huge and complex that it simply isn't worth doing it.

75 euros per hour against 30 quid at home says different.

[ThomasSoerensen]

Originally Posted by The Lone Gunman

75 euros per hour against 30 quid at home says different.

No cheapness must ensure much quickness.