Changing from UK Staff (part-time) to Germany Contractor (full-time)

[danyjr]

Hi there,

I am a UK national who has been working for a UK company for 6+ years. I changed from full-time to part-time in September 2022.

I will be moving to Germany in Q1 2024 to accompany my wife while she studies in Germany. Despite being a non-EU national (hurray Brexit...) I can get a Family Reunion visa to Germany which enables me to work there. Our living costs will be much higher than the UK which requires me switch to working full-time. My company is on-board with me working from Germany, however is concerned about how tax is paid. I have suggested to them that I can set up a limited company in Germany (GmbH) which they can hire, whilst I work as a contractor for my GmbH.

1. Will I be liable for IR35? I believe not as I will be in living Germany, paying German taxes and will no longer have anything to do with the HMRC.
2. Taking my salary into account, my company will have to be VAT-registered in Germany. How does the VAT (return) work when selling a service to a UK customer (my current employee)?

Thanks in advance

[Lance]

Germany does not recognise one-man LTD companies like the UK does. So forget doing it this way.
You can have a company but it's not worth it as I understand.

I suggest you see if you can go on the payroll. Either that or find a suitable middle person. Sue B posts here and does this sort of stuff.

Paging Sue B

[northernladuk]

Not sure how a bunch of contractors on ContractorUK is going to know all about Germany's taxation. Are there not EU or ex pat forums for people that move to Germany around?

Answer is yes of course there will be. Something like this?
https://www.expat.com/forum/viewforum.php?id=303

[danyjr]

I suggest you see if you can go on the payroll. Either that or find a suitable middle person.

Thanks for your reply. Do you mean like an umbrella company based in Germany?

[Lance]

Thanks for your reply. Do you mean like an umbrella company based in Germany?

yeah like that. Whether it's in Germany or UK depends on things I don't have any working knowledge of.

[danyjr]

yeah like that. Whether it's in Germany or UK depends on things I don't have any working knowledge of.

Me neither, though very likely I will have to pay German taxes if I live in Germany for 6+ months and I'm not sure if that's possible if my umbrella company is registered in the UK.

[courtg9000]

(it was 21 years ago when I did something a little similar). So from my memory:

You will have to pay German taxes and register in Germany. You will need a resident's permit to register for tax.
You will register as self-employed and need an accountant.
If you think the UK taxman is a git wait til you meet the German taxman!
Top tip on the residents permit form you will be asked if you are religious. If you say yes you will have to pay local church taxes as well as everything else, so make sure you say no!

[NotAllThere]

Top tip on the residents permit form you will be asked if you are religious. If you say yes you will have to pay local church taxes as well as everything else, so make sure you say no!

The keyword is Konfessionslos.

[TheGreenBastard]

I believe there is a classification that is for freelancers, roughly equivalent to being self employed (i.e. not Ltd.) in the UK, I think it has some tax benefits: "Freiberufler".

A GmbH structure required 25K initial working capital last time I looked so I doubt that's what you're after as a service provider to an existing client.

[cojak]

My only advice is to get your working and tax arrangements very right, because if you get them a bit wrong the Finanzamt will be down on you like a ton of bricks.